Important: For the Apply UK Parental Pay Rule to work correctly, it needs to run before the Auto Pay Rule, Apply UK Earnings Rule, and Apply UK Deductions Rule in the employee's payroll policy. This is because this rule can influence the calculation of auto pay and allowances and deductions. To adjust the order of a rule in a payroll policy, go to Payroll Set-up > Payroll Policies and select the payroll policy from the list. Select the rule and click the Move Up and Move Down buttons. See Payroll Policies.
To calculate statutory parental pay, you need to assign the Apply UK Parental Pay rule to the employee's payroll policy. In Payroll Set-up > Payroll Policies, select Apply UK Parental Pay in the Type drop-down list.
The rule contains the following settings:
Eligible Earnings
Select the allowances that Dayforce uses to pay out the different types of statutory pay with the following drop-down lists:
- Eligible Earning Maternity
- Eligible Earning Maternity Adoption
- Eligible Earning Paternity
- Eligible Earning Shared Parental
- Eligible Earning Parental Bereavement
- Eligible Earning Neonatal Care
The drop-down lists are cleared by default, and contain the UK allowances with the corresponding statutory earning type. The statutory earning type is set in the allowance, in the Statutory Earning field in the United Kingdom subtab of the Tax Compliance Rules tab. For example, if you select in the Statutory Earning field, the allowance shows in the Eligible Earning Neonatal Care drop-down list. See UK Statutory Allowances.
The following table shows the available earnings types in the Statutory earning drop-down list and their corresponding drop-down list in the Apply UK Parental Pay Rule:
| Statutory Earning Types | Corresponding Drop-Down List in the Apply UK Parental Pay Rule |
|---|---|
| Statutory Maternity Pay | Eligible Earning Maternity |
| Statutory Adoption Pay | Eligible Earning Maternity Adoption |
| Statutory Paternity Pay | Eligible Earning Paternity |
| Shared Parental Pay | Eligible Earning Shared Parental |
| Statutory Parental Bereavement Pay | Eligible Earning Parental Bereavement |
| Statutory Neonatal Care Pay | Eligible Earning Neonatal Care |
Stop Auto Pay
Before You Begin: This setting only applies to employees with a pay type that is enabled for auto pay, and who are eligible for the Auto Pay Rule in their payroll policy.
Select the Stop Auto Pay checkbox to prorate auto pay for pay runs based on the days where the employee is on parental leave. For example, if the employee starts parental leave in the middle of the current pay period, Dayforce still calculates auto pay based on the days the employee worked.
When the Stop Auto Pay checkbox is cleared, Dayforce continues to calculate auto pay for the employee.
Important: For proration to work, the Auto Pay Rule in the employee’s payroll policy needs to have the Enable mid-proration based on average daily hours setting enabled, or any option other than Not Enabled selected in the Mid-period proration drop-down list. These settings are used to calculate the auto pay minus the number of days of parental leave. If one of these options is not enabled, the proration cannot occur and Dayforce generates zero auto pay.
For example, an auto pay employee who is salaried and in a monthly pay group begins parental leave on 10/05/2024.
If the Apply UK Parental Pay Rule has the Stop Auto Pay checkbox selected, and the Auto Pay Rule has Business Days selected in the Mid-period proration drop-down list, the application prorates auto pay for this employee using the following formula:
[(employee salary / 12) / total business days in pay period] x business days worked
Because the employee's salary is £40,000, and they worked 7 of the 23 business days in May, the following formula is used to calculate the prorated auto pay of £1014.49 that period:
[(40,000 / 12) / 23] x 7
Regular Pay Eligible Earning, Regular Pay Ineligible Earning, Regular Pay Eligible Deduction, Regular Pay Ineligible Deduction
Before You Begin: In order for Dayforce to stop the allowance or deduction, you need to define the conditions of the stop via the Stop Payment Method setting in earning and deduction definitions. See UK Stop Payment Method.
Select one or more earning or deduction codes from the following settings to define which allowances or deductions stop, or are allowed to continue, when the employee is on leave:
- Regular Pay Eligible Earning
- Regular Pay Ineligible Earning
- Regular Pay Eligible Deduction
- Regular Pay Ineligible Deduction
For example, you need to use this setting to stop Dayforce from calculating salary sacrifice allowances when the employee is on leave.
You can select one or more options in the Regular Pay Ineligible Earning and Regular Pay Ineligible Deduction drop-down lists to determine which allowances and deductions Dayforce stops calculating when the employee is on leave. The application will continue to calculate any allowances and deductions that you don’t select.
Conversely, you can select one or more options in the Regular Pay Eligible Earning and Regular Pay Eligible Deduction drop-down lists to determine which respective allowances and deductions Dayforce continues calculating when the employee is on leave. The application stops all other allowances and deductions that you don’t select.
For example, if you select the Parking allowance code in the Regular Pay Eligible Earning drop-down list, Dayforce continues to calculate this allowance as scheduled and stops all other allowances.
Notes:
- If you select any options in the Regular Pay Ineligible Earning and Regular Pay Ineligible Deduction drop-down lists, you wouldn’t define the Regular Pay Eligible Earning and Regular Pay Eligible Deduction drop-down lists, and vice versa.
- These settings don’t prevent Dayforce from processing manual payroll entries that you make for allowances and deductions in the Payroll feature.
- You can override the stop settings for individual employees in the Payroll > Payroll Elections screen of the employee profile in People. See Stop Payment Override for UK Employees.
- When Dayforce stops a deduction or allowance, it doesn’t affect the record in the employee's payroll elections (for example, it doesn’t end date the payroll election). This means that once the employee returns from leave, Dayforce continues to calculate the allowance or deduction as normally.
- When Dayforce stops a deduction that is configured to allow an arrears balance, Dayforce doesn’t add the stopped scheduled amount to the employee's arrears balance.