The pro-rata indicators on the Allowances/Payment tab of an allowance pay code play a crucial role in determining how the system calculates and applies allowances in specific scenarios.
By understanding these indicators, you can ensure accurate adjustments and compliance with Benefits In Kind (BIK) regulations, particularly when applying BIK deductions for the days an employee is available.
Understanding these settings helps ensure accurate calculations. Below is a summary of the impact of each indicator:
Pro Rata Indicator: Select this check box if the Pay Code is a Permanent/Recurring Allowance Payment which is pro-rated by the employees Contract Hours and Timesheet Basic Hours and Pro Rata Elements. By way of example if an employee's contract hours are 39 but they have only worked 20 hours then the employee will get paid 20/39 of the value of this allowance.
Pro Rata Element: Select this check box if this Payment is an Hourly /Daily Pay Code qualifying for the pro-rata Indicator described above i.e. the hours for this code qualify for making up the 20 hours in the example above.
📌Note: This field should only be enabled if the pay code is Hours or Days.
Pro Rata Calculation: Select this check box if the pro-rata calculation is based on the number of days the allowance is paid for. Otherwise the calculation is based on the number of days in the period.