We can create a voluntary deduction element to be used for employees who are in a union, gym membership, tuition payment etc.
Here’s a step-by-step guide on how to create a Voluntary Deduction Element for Union Dues in Oracle HCM:
1. Navigate to Payroll Elements
- Go to My Client Groups > Payroll > Elements.
- Click Create to start creating a new element.
2. Enter Basic Information
- Primary Classification: Select Voluntary Deductions (this categorizes the element as a deduction from an employee’s earnings).
- Secondary Classification: If there is a more specific classification for Union Dues, select it. Otherwise, leave it blank.
- Element Name: Enter a name like “Union Dues Deduction”.
- Reporting Name: Enter a reporting name if required, such as “Union Dues”.
3. Additional Element Information
- Effective Date: Enter the date from which the deduction should be effective.
- Input Currency: Define the currency for the deduction (e.g., USD).
- Open-ended: Select this option if the deduction does not have an end date.
4. Define the Processing Rules
- Process the element at payroll run: Ensure this option is selected so the deduction is calculated in payroll runs.
- Recurring or Non-Recurring: Choose Recurring if the deduction is to be taken regularly (e.g., monthly or bi-weekly).
5. Specify the Calculation Rules
- Calculation Rule: Select how the deduction should be calculated. For Union Dues, this might be:
- Flat Amount: A fixed amount per payroll period.
- Percentage of Earnings: A percentage of the employee’s earnings (specify the earnings type if applicable).
- Set up any Predefined Values or Inputs that are required to calculate the deduction, like a specific percentage or amount.
6. Configure Element Eligibility
- Go to the Element Eligibility section.
- Click Create to define eligibility criteria for this deduction. You might set criteria based on:
- Employee Group (e.g., specific union members).
- Payroll or Location if the deduction applies to certain payrolls or regions.
7. Define the Element Entry Values
- If you need specific input values (like a custom rate or amount), define them here. Typical fields might include:
- Dues Amount: For a flat deduction.
- Deduction Percentage: For a percentage-based deduction.
8. Save and Close
- After entering all details, click Save and Close.
9. Test the Element
- Run a payroll process with a test employee to verify the Union Dues deduction is calculated correctly.