Bonus Pay Component Fields

Enter a name for the pay component.

Select one of the following options to define the effective date of the reward:

• Anniversary Date: Employees become eligible for the bonus on their next anniversary date (that is, the anniversary of their hire date) after the end date of the compensation period.
• For example, if an employee is hired on May 5, 2018, and the compensation period is January 1, 2019 to December 31, 2019, then the employee will receive the bonus from this cycle on May 5, 2020.
• Fixed Date: Employees become eligible for the bonus on a specific date. When you select this option, Dayforce also shows a date field in which you can specify a fixed effective date for the pay component.

Select one of the following options to define the source of the bonus reward type:

• None: Selected by default. The pay component doesn’t use target bonuses or compensation plans to award employees in the compensation cycle.
• Target Bonus: The pay component uses target bonuses to award employees in the compensation cycle. Target bonuses are defined as a percentage of the employee’s annual salary and are assigned based on job assignment. For example, a software developer might have a target bonus of 10%, while a senior developer has a target bonus of 15%. Target bonuses can also be assigned at the employee level if you want to award a specific employee a higher bonus than others in the same job assignment. See Configure Target Bonuses.
• Compensation Plans: The pay component uses the rules configured in the compensation plan to award employees. When you select this option, the Compensation Plan and Payout Period fields are added to the screen.
• Note: This option shows only if compensation plans are configured in Dayforce.

Select a compensation plan for the pay component. This list shows all compensation plans that have at least one effective date record within the compensation cycle period (configured in the Details tab of Compensation Setup > Compensation Cycles).

Select the payout period for the selected compensation plan. This list shows the periods configured in the effective date records of the selected compensation plan. The date and month of the payout period depends on the compensation plan period and the year depends on the compensation cycle period.

Select the earning codes that will be associated with the bonus during payroll processing. Earning codes are configured in Payroll Setup.

If you selected the Source as Compensation Plan, the earning code assigned to the selected payout period in the effective date record is shown, by default.

This field is optional and can be defined later, before posting the pay component to Payroll. See Post Completed Compensation Cycles.

Select the color that is used to identify the pay component in the worksheet.

Select the guideline that you want to use for the pay component when the Source is selected as None. This list shows Bonus guidelines that were configured with either the Percent or Amount guideline type.

See Configure Compensation Guidelines.

If you select a guideline that uses flat amounts rather than percentages, Dayforce shows a confirmation dialog box informing you of the following:

• Proration won’t be applied to allocation amounts using flat amount guidelines.
• Managers are required to enter all allocations for the pay component as flat amounts, rather than as percentages.
• The allocate by percentage column won’t be shown for the pay component.
• The guideline values are shown as flat amounts in each employee's local currency by default.

Click OK to select the flat amount guideline or click Cancel to clear the selection in the drop-down list.

Note: This field doesn’t show if you selected the Target Bonus option or the Compensation Plan option in the Source drop-down list because, in that case, you could define the guideline for each bonus factor individually. Flat amount guidelines aren't supported for pay components that use target bonuses and compensation plans.

Defines how the target bonus is determined for the pay component.

Note: This section shows only if you selected the Target Bonus option in the Source drop-down list for the pay component.

Select this option to use the target bonus configured for the employee as of the current date.

Select this option and enter a date in the date field to use the target bonus configured for the employee as of a certain date. 

For example, if your organization hands out promotions on a certain date, you might want to use the target bonuses before that date so that employees are receiving bonuses based on their job assignments during the compensation period.

Select this option, and for employees whose target bonus changed during the compensation period, Dayforce prorates each bonus based on the effective periods, and then adds them together to calculate the total target bonus percentage for each employee.

For example, if the compensation period is January 1, 2017 to December 31, 2017, and the target bonus changes from 5% to 8% during the cycle, the employee’s total eligible target bonus would be calculated as follows:

• Period 1 (January 1, 2017- March 6, 2018)
• Target Bonus Proration: 65/365 days
• Target Bonus: 5%
• Eligible Target Bonus for period: (65/365 days) x 5% = 0.89%
• Period 2 (March 7, 2017 - December 31, 2017)
• Target Bonus Proration: 300/365 days
• Target Bonus: 8%
• Eligible Target Bonus for period: (300/365 days) x 8% = 6.58%
• Total Eligible Target Bonus: 0.89% (period 1) + 6.58% (period 2) = 7.47%

Similarly, if the bonus eligible salary is prorated by a salary change, the prorated bonuses are calculated for each period separately and then added together for the total.

Add the bonus factors that will be used to calculate the target bonus payout for the pay component.

To add a bonus factor in this section, click Add and enter the details in each of the available columns (described in more detail below).

You can also import bonus factors for individual employees in the Budgets tab to override the values entered here for the pay component. See Import Bonus Factors.

Each bonus factor is shown for the pay component in the worksheet along with the configured details (weight, payout factor, and guideline) so that managers can review the payout, and, if the factors are configured to allow editing, modify the value.

Note: This section shows only if you selected Target Bonus in the Source drop-down list for the pay component.

Enter a name for the bonus factor.

Enter a value to define the weight of the bonus factor when calculating how much of the target bonus is paid out. For example, if you enter “40%” for a bonus factor based on performance, Dayforce calculates the payout amount based on 40% of the target bonus amount.

Note: The combined weight of all bonus factors can equal less than or more than 100%. When the total bonus factor weight doesn’t equal 100%, Dayforce shows a warning message but doesn’t prevent you from publishing the cycle.

Enter a bonus payout percentage for each factor. This percentage is automatically awarded to the employee when the configured target is met. This percentage can be greater than 100% if the employee exceeds the target for that factor.

Select this checkbox to allow managers to edit the payout for the bonus factor in their worksheets. When this checkbox is selected, the Guideline drop-down list is enabled.

In the drop-down list, select the Bonus guideline that you want to use for the bonus factor. This list only shows guidelines that were configured with the Percent guideline type; flat amount guidelines aren't shown.

Note: This field is enabled only if you selected the Allow Edit checkbox.

Configures proration rules for the pay component.

Note: Proration rules can’t be used for pay components that use flat amount guidelines.

Select the checkbox and Dayforce prorates employee allocations based on the number of days that each employee was inactive during the compensation period.

When you select the Prorate for Inactive Periods checkbox, Dayforce shows the Prorated for Inactive Periods drop-down list from which you can select the employment statuses that identify inactive periods for employees in your organization.

When you allocate for an employee in a worksheet, Dayforce deducts the number of days that they had an inactive status from the total number of days in the compensation period to prorate the allocation amount.

For example, if the compensation period is January 1, 2017 to December 31, 2017, and an employee was on leave (inactive) for three months during the compensation period, they would receive 75% of the allocated amount.

Select the checkbox and Dayforce prorates the allocation for new hires based on the number of days that they worked during the compensation period.

For example, if an employee is hired on July 1, 2017 and the compensation period is January 1, 2017 to December 31, 2017, then the salary increase for the employee is prorated by 50% because they only worked for half the period.

Defines how each employee’s salary is determined for bonus calculations.

Select this option to use employee salaries as of the current date.

Select this option and enter a date to use employee salaries as of a certain date. 

Select this option to prorate employees’ salaries if they had a salary change during the compensation period. If their salary remains the same, Dayforce uses their salary as of the end date of the compensation period.

Select this option to enable the import of bonus eligible salary information in the Budgets tab of Compensation Setup > Compensation Cycles.

See Import Eligible Salaries.

Defines how the budget is calculated for the pay component.

Select one of the following options to specify how the total base salary is calculated for the pay component’s budgets:

• Current Salary: Select this option to use employee salaries as of the current date to calculate the total base salary for the cycle.
• Bonus Eligible Salary: Select this option to use each employee’s defined bonus eligible salary to calculate the total base salary for the cycle. When the Source is selected as Target Bonus, the bonus eligible salary that is used is based on your selections in the Bonus Eligible Salary section for the pay component. When the Source is selected as Compensation Plan, the bonus eligible salary that is used is based on the Bonus Eligible Salary configured in the compensation plan.

Note: This section isn’t shown when the Source is selected as Compensation Plan configured with a flat amount target type.

Select the checkbox and the configured target bonuses are applied to each employee's record when generating worksheet budgets for managers in the Budgets tab of Compensation Setup > Compensation Cycles.

When the Source is selected as Compensation Plan, the target bonus configured for the selected compensation plan is used when generating worksheet budgets for managers. If the compensation plan is configured to use job assignment-based target bonus, Dayforce uses the target bonus defined for the employee's primary job assignment. This field shows as selected and disabled, if the selected compensation plan is based on a flat amount target type.

Select the checkbox and the configured proration rules are applied to each employee's record when generating worksheet budgets for managers in the Budgets tab of Compensation Setup > Compensation Cycles. This ensures that budgets are calculated and distributed more accurately for employees in the cycle.

When the Source is selected as Compensation Plan, the proration rules configured for the selected payout period in the compensation plan are used to generate worksheet budgets for managers.

Note: This checkbox shows if you selected one or more proration rules for the pay component. It isn’t shown if both the Import Eligible Salaries option in the Bonus Eligible Salary section and the Bonus Eligible Salary option in the Budget Calculations section are selected.