Oracle Fast Formulas - Chapter 44: Fast Formula for Salary Proration During Leave Without Pay (LWP)

 Chapter 44: Fast Formula for Salary Proration During Leave Without Pay (LWP)

Overview:

This formula handles the proration of salary when an employee takes Leave Without Pay (LWP). It deducts the amount for the LWP days from the total monthly salary.

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Business Logic:

• Calculate daily salary = Monthly Salary / Total Working Days

• Deduct: LWP Days × Daily Salary

• Return prorated salary

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Inputs Required:

• MONTHLY_SALARY: Gross salary for the month

• TOTAL_WORK_DAYS: Number of working days in the month

• LWP_DAYS: Number of unpaid leave days

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Sample Formula:

DEFAULT FOR MONTHLY_SALARY IS 0
DEFAULT FOR TOTAL_WORK_DAYS IS 1
DEFAULT FOR LWP_DAYS IS 0

INPUTS ARE MONTHLY_SALARY, TOTAL_WORK_DAYS, LWP_DAYS

DAILY_SALARY = MONTHLY_SALARY / TOTAL_WORK_DAYS
LWP_DEDUCTION = DAILY_SALARY * LWP_DAYS
PRORATED_SALARY = MONTHLY_SALARY - LWP_DEDUCTION

RETURN PRORATED_SALARY

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Use Case Example:

• Monthly Salary = ₹60,000

• Total Work Days = 30

• LWP Days = 3
  → Deduction = ₹6000
  → Net Payable = ₹54,000

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Best Practices:

• Use this formula in Payroll Elements with Input Values.

• Ensure LWP days are accurately fetched from OTL or Absence Management.

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Practice Quiz:

1. How is the per-day salary calculated?

2. What happens if total work days are not provided?

3. Can this formula be used for contractors?