Home / White Papers / Understanding Earning Codes

Understanding Earning Codes

Print

Introduction

The Texas A&M University System set up and defined earning codes as part of implementing the Workday human capital management (HCM) and payroll system. Earning codes are a controlled data element critical to any Workday Payroll implementation. The Workday implementation team at the Texas A&M University System defined all earnings based on business requirements.

Earning definitions and their assigned codes are available to authorized Workday users via a report called “All Earnings.” These earning codes are available for selection in Workday on payroll inputs, compensation plans and allowances depending on the type of earning.

Impact in Workday

Earning codes direct the Workday payroll calculation’s behavior and impact the gross-to-net calculation. Earning codes are also used by benefits that control additional employer contributions and employee deductions.

Impact Downstream from Workday

In addition to the impact inside of Workday, earning codes and their related attributes are critical to many integrations, including FAMIS, the Uniform Statewide Accounting System (USAS), Time and Effort, the Teacher Retirement System (TRS), and the Human Resources Information System (HRIS). Earning codes are also critical to downstream reporting.

Governing Earning Codes and Attributes

Earning code attributes further define and direct processes to report and handle each usage of an earning code appropriately.  To properly govern and control these codes and tables, the A&M System built an earning code database available to all employees and staff. The A&M System’s master list of earning codes assigns and documents the attributes attached to each earning code. To view the master list of earning codes, see the public TAMU Earning Codes website.

The remainder of this document describes the attributes assigned to each earning code found in the Master earning code database.

Earning Code Usage

Workday creates a corresponding compensation plan if the earning code is used as a one-time payment or allowance. The compensation plan is then added to the employee after the necessary approvals are completed per the business process configuration.  Once the compensation plan is in place, it will impact current and future payrolls as defined in the plan.

A compensation plan will designate the earning code and flow to Workday Payroll based on the effective date added.

Earning Families

An earning family is a group of earning codes that have similar characteristics. Earning families are primarily used for reporting, but grouping earning codes into families improves the overall understanding of the earning code concept. Each earning code is assigned to one of the following earning families:

  1. Regular Pay: Compensation for normal job duties paid hourly or salaried monthly.
  2. Overtime Pay: Compensation for normal job duties for employees classified as nonexempt and paid hourly.
  3. Allowance: Funds paid, one time or at regular intervals, for a specific purpose. Allowances are usually part of a total compensation package and are disbursed to the employee through the payroll system.

    These payments are not directly proportional to hours worked or an employee’s monthly percent effort. Examples include allowances for:
    • Cell phone
    • Housing
    • Relocation

      Allowances are not tied to hours or effort and are not reported on full-time employee (FTE) reports or included in institutional base salary (IBS).
  1. Emolument: Cash or noncash gains from position or employment. Emoluments are paid directly to the employee outside of Workday but are a taxable event to the employee and are therefore recorded in the payroll system.

    The difference between allowances and emoluments within the A&M System are:
    • Allowances are paid/disbursed and taxed through the payroll system.
    • Emoluments are paid outside of the payroll system, but the payroll system is used to assess and collect taxes on the compensation.
  1. County Funds: Special emoluments used by the Texas A&M AgriLife Extension Service to document and record payments to County Agents made by each Texas county. Most county agents are paid some of their compensation directly by the counties.

    The A&M System and Workday treat County Funds as special emoluments. Special handling is in place on these emoluments since the Texas A&M AgriLife Extension Service is responsible for paying retirement and insurance benefits on them.

    See the Understanding County Earnings white paper for more information.
  1. Lump Sum Merit: One-time merit or lump sum payments made to employees to recognize their performance or accomplishments. Merit-based salary/hourly rate increases applied to regular pay are reported with regular pay.
  2. Award: One-time payments made to employees and not subject to the A&M System policy on merit payments.
  3. Entitlement: Compensation paid to the employee based on statutory requirements not directly tied to effort. Currently, longevity is the only entitlement used by the A&M System.
  4. Lump Sum Payment: Payments to employees based on accumulated benefits or unpaid compensation. Examples include:
    • Lump sum vacation payouts
    • Payment of sick leave to diseased employee’s estate
  5. Stipend: Fixed sum paid periodically to cover expenses or in recognition of additional job duties.
  6. Uplift: An increase to the employee’s regular pay rate in recognition of special circumstances. Examples include:
    • Shift differential
    • Expatriate work subject to different taxes
  7. Additional Pay: Compensation for services that are (at least) one of the following types:
    • Temporary
    • Beyond the scope of the employee’s position restriction
    • Targeted to a specific job profile or position type
    • Related to a second position

Object Codes

Earning codes map to FAMIS object codes. Earning codes for regular pay, overtime and one-time merit payments have a complex mapping based on the employee’s faculty/nonfaculty status and title. Most other earning codes map to a single object code.

See the public Object Codes website for the master list of object codes.

Workday FIT Withholding Rate

Earning codes in Workday impact the amount of Federal Income Tax (FIT) withheld. The possible attribute values are:

  • Supplemental – 22%: FIT is withheld at the supplemental rate.
  • W-4: FIT is withheld at the employee’s W-4 rate.
  • No FIT: No FIT is withheld.

Based on the FIT Withholding Rate, earning codes in Workday will be added to the appropriate Pay Component Group, which groups all earnings together based on how they are taxed.

Workday Assess and Withhold Retirement

Earning codes may or may not be subject to retirement contributions. For example, base pay is subject to retirement holdings, but employee relocation allowances are not. The earnings code database reflects the Workday configuration.

Possible attribute values are Yes or No.

TRS Creditable

Each earning code is marked Yes or No, depending on whether the earnings must be reported to the Texas Retirement System (TRS). This attribute is used during the A&M System integration to TRS TEAM.

See the Creditable Compensation page on the TRS website for more information.

Include on FTE Report

Each earning code is marked Yes or No, depending on whether the pay and effort are reported on the State Auditor FTE report. This data element is used exclusively in the Electronic Data Warehouse (EDW) application.

Include for Time and Effort – IBS

Each earning code is marked Yes or No depending on whether the payroll expense is part of the IBS and sent to the Time and Effort system.

As defined by the A&M System, IBS is the total guaranteed annual compensation an Individual receives from an A&M System institution or agency, whether the individual’s time is spent on research, teaching, patient care or other activities.

Other institutions have a more in-depth definition of IBS. For example, IBS is defined by the University of Buffalo (UB) as the annual salary paid to an individual to perform all professional obligations required by the individual’s primary UB appointment. These professional obligations may include research, teaching, administrative functions and/or other service activities and are generally identified in the individual’s appointment or reappointment letter. Unless otherwise specified, the annual salary stated in the appointment or reappointment letter fully compensates the individual for all professional obligations required by their primary UB appointment. IBS excludes any income that an individual is permitted to earn outside of duties performed as part of their primary UB appointment.

IBS is set prospectively for an indefinite period or a specified term. It may not be increased or decreased based on the availability of salary support from sponsored agreements or other revenue sources.

FAMIS – Payroll History Compute Hours

If marked Yes, the integration with Workday that builds the FAMIS payroll history data set will attempt to allocate hours worked to this earning code (if hours are available).

FAMIS – SGIP (GIP)

FAMIS uses this attribute to control the allocation of the employer group insurance premium (GIP) to the set of appropriate earning codes. GIP is often called state GIP (SGIP) since the State of Texas often funds it. Typically, the GIP is charged to earning codes in the Regular Pay earning family. By attaching GIP charges to these earning codes, FAMIS also ensures that GIP is allocated to accounts in proportion to regular pay.

Possible values are:

  • Yes: Earning code (if present) will receive a proportional share of the GIP charge.
  • No: Earning code will not receive a proportional share of the GIP charge. Special allocation rules are in place for the allocation of GIP in the summer months.

FAMIS – Retirement

FAMIS uses this attribute to control the allocation of retirement expenses (TRS or optional retirement program [ORP]) to the set of appropriate earning codes.

Possible values are:

  • Yes: Earning code (if present) will receive a proportional share of the employer retirement contribution.
  • No: Earning code will not receive a proportional share of the employer retirement contribution.

FAMIS – FICA

FAMIS uses this element to control the allocation of the Federal Insurance Contributions Act (FICA;  Old-Age and Survivors Insurance [OASI]/OAHI [Medicare]) expenses to the set of appropriate earning codes.

Possible values are:

  • Yes: Earning code (if present) will receive a proportional share of FICA.
  • No: Earning code will not receive a proportional share of FICA.

FAMIS – FIT

FAMIS uses this attribute to control the FIT allocation to the set of appropriate earning codes.

Possible values are:

  • Yes: Earning code (if present) will receive a proportional share of FIT.
  • No: Earning code will not receive a proportional share of FIT.

Since FIT is an employee deduction, the allocation of FIT does not impact accounting.

FAMIS – Unemployment Compensation Insurance (UCI)

A value of Yes indicates that the integration with Workday that builds the FAMIS payroll history data will attempt to allocate and assess UCI to this earning code.

FAMIS – Workers Compensation Insurance (WCI)

A value of Yes indicates that the integration with Workday that builds the FAMIS payroll history data will attempt to allocate and assess WCI to this earning code.

FAMIS – Emolument (EMOL)

A value of Yes indicates that special processing occurs. The special processing is as follows:

  • The emolument will onlybe allocated FICA (OASI, OAHI) deductions.
  • The emolument will be allocated FIT/state income tax (SIT)/local income tax (LIT).  Note that the allocation of deductions does not change accounting; it is only for reporting.
  • Emoluments are no longer assessed UCI and WCI.  Note that before FY 2025, most emoluments were assessed UCI and WCI.
  • Covered earnings for the above are set to the earned amount itself.
  • The earned amount will be zeroed out (gross pay set to zero) because the earned amount does not need to be expensed in accounting.

A value of No indicates that regular benefit allocation processing occurs. Such processing uses other flags/attributes of the earning code.

FAMIS – Allowance

A value of Yes indicates that special processing occurs. The special processing is as follows:

  • The allowance will onlybe allocated FICA (OASI, OAHI) deductions.
  • The allowance will be allocated FIT/SIT/LIT.  The allocation of deductions does not change accounting; it is only for reporting.
  • The allowance will be assessed UCI and WCI.
  • Covered earnings for the above are set to the earned amount itself.
  • The earning amount will be expensed in FAMIS

A value of No indicates that regular benefit allocation processing occurs. Such processing uses other flags/attributes of the earning code.

FAMIS – Task Payment

A value of Yes indicates that this earning code is considered a task payment. Task Payment is a legacy reporting attribute only.

FAMIS – Longevity

A value of Yes indicates that this earning code should get an allocation of the longevity payment.

Group 100%

This attribute is used to assign source percent effort. Possible values are:

  • No: The earning code will stand alone with no grouping in the percent effort calculation and, therefore, will always get 100% of whatever benefits/deductions are associated with the earning code.
  • Yes: Groups earning codes together for dispersing benefits and deductions.
  • Incremental: This value was added after several payrolls were run following the release of Workday HCM. A new grouping was needed to combine some earning codes to distribute their associated benefits/deductions properly but not include them in regular pay.
  • All other values are grouped with like values when computing percent effort (i.e., Yes and Incremental).

Pay Type

FAMIS assigns this pay type to the Payroll History record. Pay Type is a legacy value used in the previous Budget Payroll Personnel (BPP) system. The Pay Type value should not be used for reporting; the earning code itself should drive reporting. However, the value is assigned to facilitate backward compatibility.

Possible values for Pay Type in the Pay History file are:

  • B: Normal Budgeted Monthly (FAMIS automatically converts to H if hourly biweekly)
  • D: Death Benefits
  • E: Adjustment or Correction Entry
  • F: Work Study
  • H: Normal Hourly Biweekly
  • I: Monthly supplemental Pay
  • J: On-Demand Payment – Monthly Payroll
  • K: On-Demand Payment – Biweekly Payroll
  • P: Biweekly Supplemental Pay
  • Q: Biweekly Supplemental Pay
  • U: Emolument
  • V: Vacation Lump Sum Payout

FAMIS Screen 730 (Earning Code / Object Code Table) does not currently allow for a value of H. FAMIS will automatically change the Pay Type from B to H during the pay history generation process for biweekly payroll cycles for all earning codes with a Pay Type of B.

Include in FTE Base Pay

A value of Yes indicates that this earning code should be added to base pay (regular pay hourly [RPH], regular pay salary [RPS]) for the current FTE salary and FTE monthly salary calculation.

This attribute was used to calculate FTE monthly salary rate, which becomes the denominator in the FTE calculation, but it is no longer used.

Allowance Encumbrance

A value of Yes indicates that this earning code does utilize allowance encumbering in FAMIS.

HRIS Pay Transaction Type

Earning codes map earnings to Human Resources Information System (HRIS) payroll transaction types. The following HRIS transaction types are allowed:

  • LS: A lump sum payment of accumulated annual leave upon employee termination or a lump sum payment for half of the accumulated sick leave or 336 hours, whichever is less, upon the death of an employee.
  • OP: Overtime payment for hours worked and regular work hours for an employee subject to the Fair Labor Standards Act (FLSA).
  • RP: Regular payment for regular work hours.
  • SP: Supplemental payment for an amount not included in the regular monthly payroll, a one-time payment for work performed in addition to an employee’s regular job or a one-time merit payment (1XM entitlement).
  • TP: Task/temporary payment for nonreportable, college work-study and student-status employees.

HRIS permits other Pay Transaction types, but only the above types are used with earning codes

HRIS Entitlement Code

Earning codes map earnings to HRIS payroll entitlement codes. The following HRIS entitlement codes are allowed:

  • 1XM: One-time merit award
  • ALP: Annual Leave Pay
  • AWD: Award Pay
  • BSY: Base Salary
  • CAR: Car Allowance
  • CLO: Clothing Allowance
  • CRT: Certification/Advanced Degree Pay
  • CSS: Cost of Living Salary Supplement
  • CTP: Compensatory Time Pay
  • ENR: Enrichment
  • EXP: Expense Allowance
  • EXM: Emergency One-Time Merit Award
  • HAZ: Hazardous Duty Pay
  • HLY: Hourly (Temporary Hourly only)
  • HOU: Housing Allowance (Including Utilities)
  • LDP: Location Differential Pay
  • LOG: Longevity Pay
  • MLS: Meals
  • MSC: Miscellaneous Entitlement
  • OCP: On-Call Pay
  • OTP: Overtime Pay
  • SCH: Scholarship Allowance
  • SDP: Specialty Differential Pay
  • SEV: Severance Pay
  • SHD: Shift Hours Differential Pay
  • SLP: Sick Leave Pay
  • SPA: Augmentation/Special Augmentation
  • SRB: Retention Bonus
  • SSP: Student Status Payments (College Work Study/Student Status only)
  • STI: Stipend/Extra Duty Pay
  • SUP: Salary Supplementation
  • TOP: Teaching Overload

HRIS Payroll Type

Earning codes map earnings to HRIS payroll types. The following HRIS payroll types are allowed:

  • BIW: Biweekly – Regular
  • MON: Monthly – Regular
  • LUM: Lump Sum Payments
  • OTP: Overtime Payments
  • SUP: Supplemental