Oracle Payroll Accounting Basics

Please find the very basics of Accounting in Oracle HR and Payroll Module.

Golden Rule of accounting from ORACLE PAYROLL

Dr :- Actual Account

Cr :- Balancing Account

When LD(Labour Distributions) comes into play, “Actual Account in Payroll” is
replaced by “Clearing Account in Payroll”.

Based on above golden rule, for Earning Elements, following account
entry takes place .

The payroll run result value is +ve for “XX_Custom Basic Salary”

Step	Credit	Debit	Element	How to recognise
Post from Payroll	Balancing Account		XX_Custom Basic Salary	Pickup Balancing entries for LD elements when in Credit
Post from Payroll		Clearing Account	XX_Custom Basic Salary	Ignore debit entries for LD elements
Post from LD	Clearing Account		XX_Custom Basic Salary
Post from LD		Actual Account	XX_Custom Basic Salary

For Rebate element, following accounting takes place

( golden rule is violated, as the original entries need to be either fully
or partially reversed). The payroll run result value is –ve for Rebate Element

Step	Credit	Debit	Element
Post from Payroll		Balancing Account	NI Employers Rebate
Post from Payroll	Clearing Account		XX_Custom Basic Salary
Post from LD		Clearing Account	XX_Custom Basic Salary
Post from LD	Actual Account		XX_Custom Basic Salary

Conclusions( Not taking LD into account. These rules apply to costing entries in Payroll.) :-

1. The golden rule applies only when run result values are Positive.

a. If run result value is positive, then

v Credit Balancing Account

v Debit Actual Account

2. The golden rule DOES NOT apply when run result values are Negative.

a. If run result value is negative, then

v Credit Actual Account

v Debit Balancing Account

3. The distributed element has a negative run result value then

a. Debit entry is made against Actual Element ( i.e. “NI Employers Rebate” )

b. Multiple Credit entries are made against elements in Distribution Set
( i.e. XXX_BASIC_SALARY, XXX_LONDON_ALLOWANCE etc)

NI Employers Rebate	2.25	Dr	Balancing Account
Basic Salary	2.15	Cr	Actual Account
London Allowance	0.1	Cr	Actual Account

4. The distributed element has a positive run result value then

a. Credit entry is made against Actual Element ( i.e. “NI Employer” )

b. Multiple Debit entries are made against elements in Distribution Set
( i.e. XXX_BASIC_SALARY, XXX_LONDON_ALLOWANCE etc)

NI Employer	399.99	C	Balancing Account
Basic Salary	382.57	D	Actual Account
London Allowance	17.42	D	Actual Account

Set as favorite

Bookmark

Email This

Comments (20)

Subscribe to this comment's feed

...
written by Dilip , November 03, 2006

Hi Anil,
Can I get some more basic information about Payroll.

report abuse

vote down

vote up

Votes: -1

...
written by Dilip , November 03, 2006

Hi Anil,
Can I get some more basic information about Payroll.

report abuse

vote down

vote up

Votes: -1

...
written by Anil Passi , November 15, 2006

Sure you can, but it is only logical to begin with HRMS first. I am covering HRMS topics for next couple of weeks. Some of those topics have been posted already

thanks
anil

report abuse

vote down

vote up

Votes: +0

...
written by Anil Passi , November 15, 2006

Sure you can, but it is only logical to begin with HRMS first. I am covering HRMS topics for next couple of weeks. Some of those topics have been posted already

thanks
anil

report abuse

vote down

vote up

Votes: +0

...
written by ayman , November 16, 2006

feefef

report abuse

vote down

vote up

Votes: +0

...
written by ayman , November 16, 2006

feefef

report abuse

vote down

vote up

Votes: +0

...
written by Rinkesh , December 12, 2006

Hi Anil,

I have found your site very informative and good for both Technical and functionals.I was working in Financials since last four yrs now i have got work in HRMS/PAYROLL.so i want to learn inouts of HRMS..functionality of hrms...if you have some student guide kind of stuff..or steps to learn HRMS/PAYROLL with table details that will great help for me.
Please mail me if you have this kind of document...i am refering your articles on your portal as well.

Thanks a Lot

Rinkesh

report abuse

vote down

vote up

Votes: +0

...
written by Anil Passi , December 12, 2006

Hi Rinkesh,

Congrats for having joined the HRMS/Payroll cub. This is one of my favourite modules.

I dont have a student guide I am afraid. But I will write something up on important Payroll tables.

Thanks
Anil Passi

report abuse

vote down

vote up

Votes: +0

...
written by Rinkesh , December 12, 2006

report abuse

vote down

vote up

Votes: +0

...
written by Anil Passi , December 12, 2006

report abuse

vote down

vote up

Votes: -1

...
written by kirankumar , December 20, 2006

my question is can i get complete reference ob payroll 11i hrms
can u give some booknames

report abuse

vote down

vote up

Votes: +0

...
written by kirankumar , December 20, 2006

my question is can i get complete reference ob payroll 11i hrms
can u give some booknames

report abuse

vote down

vote up

Votes: +0

...
written by Thanigaivelan , April 03, 2007

Hi Anil, It would be great if you could throw some light on costing of payment methods. How can we achieve this if we are going to develop a customized process for payments processing (like bank transfer procedure) ?

Thanks and Regards,
S. Thanigaivelan

report abuse

vote down

vote up

Votes: +0

...
written by Anil Passi , April 04, 2007

Not sure if your question was in Payroll context or general Payables

Assuming you are refering to costs associated with payment methods like CHAPS, SWIFT etc.
These payments can costs from 1 to 10 USD, depending upon the correspondance bank structure in place.

A service provider that makes these transactions[i.e. sends our messages accross to SWIFT network] will be sending you lumpsump invoices.
You can put charge those invoices into a placeholder account.

next, you can run the custom monthly process that reads all the SWIFT payments on monthly basis, and apportions the transfer charges accross to different cost centres.
this custom process can post straight to GL [and it will credit the placehold account entries from AP]

Rules for apportioning can be discussed with your business analysts

Thanks,
Anil Passi

report abuse

vote down

vote up

Votes: +0

...
written by Kadhiresan L , April 17, 2007

Hi,

Real useful stuff. Thanx.

Could you please pass on some step by step processing payroll docs.

this will be more useful.

Thanx & Regards,
Kadhiresan L
Chennai

report abuse

vote down

vote up

Votes: +0

...
written by Anil Passi , April 20, 2007

Hi Hari

I have written step by step demo on fast formulas

please see http://oracle.anilpassi.com/or...ing-3.html

Thanks,
Anil Passi

report abuse

vote down

vote up

Votes: +0

...
written by Kadhir , May 03, 2007

Hi Anil,

This is my second time of contacting you to have very urgent help.

Kindly give some material or setup docs of OAB (Advanced Benefits). THIS WOULD BE GREAT HELP FROM YOU.

Thanx & Regards,
Kadhiresan L
09840260674

report abuse

vote down

vote up

Votes: +0

...
written by ramesh , August 28, 2007

hi anil,
this is ramesh,pls help me in getting API's in HRMS.and if possible any API inbound

Thanks & Regards
ramesh

report abuse

vote down

vote up

Votes: +0

Payroll Costing
written by CK , March 13, 2008

Hi Anil
I have enter costing element link level salary expense Account 0001 and Balanacing (payroll clearing) 9999. After payroll run costing summary shows Salary expense Debit and Payroll Clearing Credit. Please tell me how to i can reverse this entry or set off this liability. In other words what entry finance pass in against my Payroll entry. Please also tell me How AP will pay this payment
Many Thanks
CK

report abuse

vote down

vote up

Votes: +0

Payroll Purge History Data
written by Amar Chakraborty , December 30, 2008

Hi,

Any document or link available to purge history records in Oracle Payroll ?

Thanks
Amar

report abuse

vote down

vote up

Votes: +0

Write comment

Name