Recently the Dynamics AX HCM team release a couple of new enhancement for Payroll in Dynamics AX 2012 R2. The enhancements add the support for retroactive earning generation and zero earning pay statements. These enhancements were delivered as part of KB2978309 which you can obtain from LCS. These features will be made available for the Dynamics AX R3 release as part of CU8 which is coming later this fall. This post covers the zero earning pay statement functionality, an earlier post covered the retroactive earning generation portion of the update.
Zero earning pay statements
So you read the heading and are now wondering what in the world we mean by zero earning pay statements. Well prior to this enhancement they didn't exist in Dynamics AX Payroll. With this enhancement a couple of capabilities were introduced. This changes result in the ability to perform numerous critical payroll scenarios. We now offer the ability to be able to create pay statements wither with no earning lines at all or with lines that have hours/quantity, but no dollar value/rate. Thus in both cases they create zero earning pay statements. I'll go into detail on two key changes that were made and list potential scenarios that each can enable for your payroll staff.
Zero value pay statement lines
It is still true that if you want earning lines on a pay statement you must start by creating them on an earnings statement first. What this fix does is now allows those lines that have a zero dollar rate/amount value to process through to the pay statement during pay statement generation. Prior to this change any earning statement line that had an amount value of zero was left behind and never processed. This change enables the following key scenarios, and likely many more that I am not listing:
- Employees can now be put on a leave using an earning code with a flat rate of zero. These lines will now process forward into the pay statement to account for hours on leave and impact benefit accruals. But also the remainder of the pay statement generation process will run for that worker and their benefit deductions will arrear and benefit contributions will accrue.
- In the event an adjustment needs to be made to hours, but not dollars, these lines will now move forward to the pay statement to process and impact taxes and benefits.
One thing to notice also is that a new field was added to the earning code, "Allow editing of earning statement rates". If you enable this on the earning code then the system will allow you to override the system calculated value for the rate column on an earnings statement line for that earning code. This is great for zeroing out or adjusting the amount of system calculated lines. Also, for those of you that need to load beginning balances from a legacy system when cutting over to Dynamics AX Payroll you can now use this capability to override the rate on your lines. You no longer need special cut-over earning codes. Now your YTD amounts can align by earning code. The only restriction to this is that a line created as a salary balancing line (the earning statement line has a source of "Salary") cannot be edited without disabling the salary functionality from the action pane.
Pay statement without earning lines
When you open the pay statement list page (Payroll > Common > Pay statements > All pay statements) you will notice that the left most button in the action pane at the top of the form has changed from a "Generate pay statements" button to a "New pay statements" button. Prior to this change the button simply called the generate process which looked back for any released earning statement lines for the selected pay period and prior and processed those into a pay statement. Now with this "New" button it no longer looks back to grab lines from the earning statement. Clicking it will prompt for the basic key information to create the shell of a pay statement.
Once the shell of the statement exists, you are able to manually key in whatever benefit and tax lines are needed. You are not able to add earning lines here (to do this you need to use the functionality mentioned above in the Zero value pay statement lines). This change enables the following key scenarios, and likely many more that I am not listing:
- Refund of a benefit deduction, garnishment, or tax when to an employee that will not receive any net new earnings.
- Adjust employer benefit and tax contributions to allow the payroll system and the general ledger system to remain in balance
- Force the creation of arrears and benefit contribution accruals for an employee that does not receive any pay and that does not have any zero value earning statement lines to process as mentioned above.
There are a few caveats to this functionality. The payroll system auto determines applicable taxes based on the tax region of the earning statement lines. In these scenarios you do not have any earning lines with a tax region to tell the system the work location in which to consider taxation, therefore the system will not calculate any taxes (employee or employer). These must be calculated manually and entered as lines on the pay statement. In addition to entering the actual tax amounts on the pay statement, you must make entries in the Tax transaction history form to record the adjustments to the wage bases for all applicable taxes.
Summary
While small, these changes open up support for many scenarios in a more systematic way, and in some cases enable functionality that was not even supported before. We know it is a common place to have employees with special situations where these capabilities are important.
The Dynamics AX HCM R&D Team