Hi Everyone,
We would like to seek your advice regarding the STB Calculation Base for Variable Pay. Currently most of the markets/countries are using the Annual Salary as basis for calculation. However, there are few countries who will be using the Actual Earnings in Payroll by the end of the year. And in using this, we are seeing that we will be having double proration since the STB Calculation Base is already prorated.
Sample Scenario:
Employee hired in the middle of the year (July 2020)
Monthly Salary = 1000
STB Calculation Base:
1) Using Annual Salary = 12000 (1000 x 12)
Target % = 8
Target Bonus = 960
Proration Period = 182/366 = 49.73%
Prorated Target Bonus Payout Amount = 477.41
2) Using Actual Earnings = 6000 (July to Dec = 1000 x 6)
Target % = 8
Target Bonus = 480
Proration Period = 182/366 = 49.73%
Prorated Target Bonus Payout Amount = 238.70
From these examples, you can see that in using the Actual Earnings as STB Calculation Base, once we run the Variable Pay program the system would read the employee being eligible only starting July 2020 from the Employee History and would then prorate the amount again. This is where the double proration happens when using the Actual Earnings which is incorrect.
Kindly help advise on how we can deal with these cases. Is there a functionality where we can exclude these countries from being prorated in the Variable Pay program to avoid the double proration?
Hope you can give us feedback the soonest as the markets will start testing next week.
Many thanks in advance!
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