Note: Budgets are shown in the cycle currency that you defined in the Currency drop-down list of the Details tab.
You can define the budget for each pay component in the Set Budget dialog box. Alternatively, you can import the budgets for each manager, which provides more flexibility when assigning budgets. See Import Budgets by Manager.
If the Apply Target Bonus and the Apply Funding checkboxes were selected for a pay component, you set the budget by defining the amount (the portion of the total target bonus) that will be used for target bonus payouts. By default, this budget is set at 100%, but you can update this setting by entering a value either as a fixed amount or as a percentage of the total target bonus in the Set Budget dialog box. Alternatively, you can use the Bonus Funding by Employee import to update the distributed budget values based on custom funding percentages for each employee. See Import Bonus Funding by Employee.
If the Apply Target Bonus and the Apply Funding checkboxes were selected for the pay component, after you set the budget, the default funding percentage is set as the budget percentage in the manager worksheet.
To define budgets using the Set Budget dialog box:
- Go to Compensation Setup > Compensation Cycles and click the Budgets tab.
- Click Set Budget in the tab toolstrip. Dayforce opens the Set Budget dialog box.
- For each pay component, select an option to define how you want to calculate the budget, and then enter the corresponding value in the text box as follows:
- Fixed Amount: Enter the total budget as a fixed amount. This amount is distributed to the managers in the organization structure according to the number of their direct reports.
- Percentage of Total Base Salary: Enter a percentage value to set the budget based on that percentage of the total base salary. For example, if you enter 3% and the total base salary is $333,000 for the organization, the total budget would be $9900, and each manager’s budget would be set at 3% of their employees’ total salary.
- Percentage of Total Target Bonus: Enter a percentage value to set the funding amount for target bonus payouts in the cycle. This value defines what portion of the total target bonus will be used to fund target bonus payouts in each manager's worksheet. For example, if you enter 85% as the funding percentage, and the total target bonus is $333,000, the total budget would be set as $283,050, and each manager’s budget would be set at 85% of their employees’ total target bonus.
- Note: This option is shown only if the Apply Target Bonus checkbox was selected for the pay component in the Pay Components tab.
- Guideline: Select the guideline that you want to use to calculate the budget for the pay component. This list shows guidelines created for the reward type assigned to the pay component. By default, the guideline assigned to the pay component in the Pay Components tab shows. If you select another guideline, the guideline selected in the Pay Components tab doesn’t change. The Min, Mid, and Max options show if you select the guideline configured with the Range value type. To calculate the budget, you can choose the guideline range's minimum, mid-point, or maximum value. You can’t select guidelines based on performance to calculate the budget if you configure the performance rating as Do Not Include or Enter In Worksheets in the Details tab of the compensation cycle.
- Click OK. Dayforce updates the budget for the managers in the org structure according to the values that you entered.
You can set a pay component not to use a budget or to allow managers to exceed their budget by selecting one of the following options in the list of pay components:
- No Budgets Distributed: Select this checkbox to allow managers to allocate salary increases or bonuses based only on guidelines or payout factors, without a defined budget. When you select the checkbox, any existing budget information in the organization list is cleared. For pay components that use budget calculations based on target bonuses, the default funding percentage is 100% when the No Budgets Distributed checkbox is selected.
- Important: Imported funding values aren't affected. They remain in the worksheet when you select the No Budgets Distributed checkbox.
- Note: This checkbox is disabled after you import the funding values for employees.
- Allow Managers to Exceed Budgets: Select this checkbox to allow managers to exceed their allotted budget when completing their worksheets. The manager is asked to enter a justification for exceeding the budget before submitting the worksheet.
When you set the budget based on guidelines for pay components configured to use funding, Dayforce calculates the funding for all employees based on the guidelines, locks the budget, and disables the No Budgets Distributed checkbox. You can select the pay component in the Unlock Budgets drop-down list to delete the funding values and reset the budget.
After the budgets are set for the pay components, you can adjust the budgets for individual managers as needed. If you want to allow a manager to allocate for some of the pay components in the cycle but not others, you can set the budget for those pay components as 0.
Pay components with zero budget are excluded from the manager's worksheet when they open it in the Compensation feature. For senior managers reviewing the worksheets in the My Organization tab of Compensation, the pay components with zero budget show only if one or more of their direct or indirect reports were assigned budget for those pay components.
Note: Managers assigned zero budget for a pay component must be assigned budget for at least one other pay component in the cycle, or at least one of the pay components must have the No Budgets Distributed checkbox selected.