How to create earnings and deductions? : Buk Colombia

Objective:

The purpose of the article is to provide detailed instructions on how to access and use the earnings and deductions item creation function on the platform. The article guides the user through the necessary steps to create new items, ensuring they understand all the fields and settings available to customize these items to their needs. In addition, the article highlights additional options and advanced settings that can be applied to these items.

Scope / Limitations:

This article will provide item administrators with a solid understanding of how to create earnings and deductions in Buk, focusing on general settings and advanced options that allow for customization of calculations, adding items, and grouping of items in pay stubs across different files in the process. This includes crucial aspects such as grouping in the Electronic Payment Register, where configuring the item parameters is essential to ensure correct reporting.

Please note that this article will not cover the handling of deductions related to loans or earned wage access, as these topics are detailed in their respective specific articles.

Definitions:

Earnings” are a category of income or compensation that a person receives as part of their salary or compensation for their work. These earnings are typically positive components of an individual's remuneration and can vary depending on the nature of their employment and the established labor agreements. They are divided into two categories: earnings subject to SS deductions and earnings not subject to SS deductions.
Subject to SS deductions: Refers to earnings that are defined as "Compensation" under Article 42 of the Labor Code. These earnings are subject to mandatory deductions such as taxes, health contributions, and social security institutions, union dues, etc. The mentioned articles indicate that some types of compensation include: Salary, Overtime, Commission , Participation, Bonus (which can be agreed upon between the employer and the employee as a way to reward the fulfillment of different conditions, which can include production, achievement of goals, punctuality, responsibility, seniority, etc.) and "Semana corrida".

Earnings not subject to SS deduction - are allowances that do not constitute compensation, and therefore, are exempt from deductions. According to Article 41 of the Labor Code, the following are defined as not subject to SS deductions: Transportation allowance, Cash loss allowance, Tool wear allowance, Meal allowance , Travel expenses, Family benefits granted in accordance with the law, Indemnity pay for years of service as established in Article 163, and other payments due upon termination of the contractual relationship, reimbursements for work-related expenses.

Deductions: "Deductions" refer to specific subtractions or deductions made from a worker's salary or compensation. These deductions can vary and may include various categories, such as:
Legal deductions:
These are mandatory deductions that must be made according to current legislation to fulfill social (social security, health, unemployment) and tax obligations (taxes).
Voluntary deductions:
These are deductions agreed upon between the employer and the employee, but which are not mandatory by law. These can include additional contributions to pension funds, private health insurance, loans, or advances granted by the employer, among others.
Union deductions: If the worker is a member of a union, there may be union deductions authorized by the worker to finance the union's activities.

Legal Basis and Applications:

The definitions and regulations related to Earnings, Subject to SS deductions, Not subject to SS deductions, and Deductions are based on Chilean labor legislation, specifically in the Labor Code in its Articles 41, 42, and 58. These categories and their applications are fundamental in determining how workers' compensation is structured and adjusted in Chile, ensuring compliance with legal and tax obligations.

Additionally, when creating items, they will have main and special configurations that will help parameterize the item according to the company's needs. The main configurations include:

Field	Description	Image
Name	Name to be displayed on the pay stub.
Code	The code will be the same as the item name, but it can be changed during creation. The code must be unique and include only letters, numbers, and underscores (no other characters such as uppercase letters, accent symbols, etc., are accepted).
Subject to SS deductions	Applies only when creating an earning. Select "Yes" if the earning will be subject to SS deductions, or "No" if it will be not subject to SS deductions.
Calculation Tax rate	If the earning is subject to SS deductions, it can be included in the calculations of: Overtime, Sick Leave Contribution, Bonus, and Semana Corrida. If the calculation method is "Prorated Absence," the item can be included in the calculation for "Non-worked Hours."
Calculation Method	There are four different calculation methods: Fixed: The defined value will be the same as the value on the pay stub, regardless of any absences unless these absences total 30 days in the month. Pro-rated Leave: The defined value will be proportional to the days worked. That is, absence such as unexcused absences or sick leave will not be considered in the calculation of the item's value. Net: This process only applies when creating an earning. The system will automatically increase the total amount of the "Net to receive" on the pay stub by adding the defined earning value. For example, if a net earning with a value of $30,000 is created and an employee has a "Net to receive" on their pay stub of $600,000, the amount the employee will receive will be the sum of the original "Net to receive" (before adding the earning) plus the earning value, that is, $600,000 + $30,000, which equals $630,000. The value that appears on the pay stub for the net item will depend on whether it is included in any calculation, such as a bonus. Special: These items are created by our team for special customer requests and are not editable. If you have any questions regarding the scope or applications of these items, you can contact SAC via email at [email protected]. Formulated: Allows for the definition of a formulated item whose value is calculated using a formula with specific variables. This formulated item has the flexibility to incorporate conditions, use pre-created tables or KPIs, and even include work or employee data in the formula. If you want additional information on how to use formulated items, please click on the following link.
Amount to Add	Same for all: The value of the earning or deduction will be the same for all employees to whom the item is added. If you select this option, an "Amount" box will appear for you to enter the value of the item. Different for each person: The value of the earning or deduction is defined when adding it, either individually or in bulk.
Currency	Set the currency type for the item: Pesos ($) or UF.
Effective Start Date	Indicates the start month of the item according to the open month on the platform (informative and non-editable).
Type of Compensation	There are three types, which apply only to earnings and define how the earning is reflected in the calculations of a potential termination process: Occasional: The earning will not be included in termination calculations. Fixed: The value of the last applied month is taken into account. Variable: The average of the last three values present in the last three complete pay stubs is calculated.
Account	In this option, the accounts created by the client will be displayed. In this view, the account should be added to reflect or group the amounts for this added item. If not established, the items will be added to a default account called "cuenta_contable_descuentos_por_defecto" and "cuenta_contable_haberes_por_defecto," respectively.

Additionally, earnings and deductions can have additional configurations such as:

Field	Description	Image
Limit by data sets	By checking this box, the item will be visible to users not limited by data sets or those selected in any data set.
Limit by Area	By checking this box, the item will be available in the areas selected in the "Select Sub-areas" box.
LRE Grouping	Allows selecting the grouping that the item will have in the Electronic Payment Register (LRE). Without this information, the file cannot be correctly generated as it will lack the necessary information for proper reporting. For more information, click on the following link to the User Manual shared by the DT.
Payment Register Grouping	Allows grouping payroll items in the Payment Register so that the register can be issued in organized columns grouping common items.
INE Grouping	Defines the grouping code for job titles for companies that must respond to the INE Wage and Labor Cost survey.
Affects Minimum Wage Calculation	Option to determine if the item affects the minimum wage calculation.
Requestable	Allows the item to be requested from the employee's profile and approved through a request flow.
Expiration Date	Allows setting the end date of validity for the created earning or deduction.
Termination process	Allows the deduction to be added via the termination process.
Benefits	Allows to establish the adding of the item through benefits.
Negative pay	Allows the earning to be considered in case of negative pay on the pay stub.
Non-Taxable	Check this option when you want the earnings to be subject to SS deductions but non-taxable. That is, subject to social security laws but non-taxable for income tax purposes. This option appears only if the "Include in Calculations" section does not select the "Bonus" checkbox.
Self-Add	Sets the automatic adding of the item when creating a new employee on the platform. For this option to be available, the item must have an amount to add as "Same for all."
Taxable	Check this option when you want the earnings to be not subject to SS deductions but taxable. That is, not subject to social security laws but taxable for income tax purposes. This option appears only if the earning is "Not subject to SS deductions."
Exclude from Holiday Compensation	Allows the item to not be considered for holiday compensation calculation purposes only if the "Type of Compensation" is "Fixed." for example, if creating a "Bonus" item.
Payee	Select if the objective is to allow the item payment to a third party.
Allow Negative Values	Allows the item value to be negative and reflect on the pay stub. If not active, an error will appear in case of negative values in the item.
Calculation Order	Sets the order to calculate the item, i.e., before or after a specific item.
Order in Pay stub	Establishes the order in which the item appears on the pay stub.
Description of Calculation for Pay stub Attachment	The description inputted in this field will appear on the pay stub as a detail or attachment for employees to whom this item has been added. This item is used to provide detailed explanations of calculations or specific concepts related to certain items, allowing employees to understand the item contained on their pay stub in more detail.

Individual Platform Process:

Access the "Administration" menu within the "Items" module. Next, click on the "Earnings" or "Deductions" option, as needed. Then, select "Create New Predefined" to access the interface for creating your own Earnings or Deductions.

Enter the main fields of the item and the additional configurations located in the "Advanced Options" section.

Once the item is configured, press "Save" to keep the changes.

Bulk Platform Process:

From "Information," select the "Importers" module and then "Importers." In this view, you will find the importer for "Earnings Structure" and "Deductions Structure," respectively.

Select your importer and review the loading instructions in detail. Download the template and fill it with the required information. In the following table, we provide the loading instructions so you can fill in the mandatory fields and define the advanced configurations from the template:

Item	Description
Deduction	"Fixed," "Prorated Absence," "Percentage of Base Salary," "Net," "Special."
Name	Earning/Deduction Name
Code	Must be unique and consist only of letters, numbers, and underscores. It cannot be modified once the item has been created.
Amount	Earning/Deduction Amount
Amount Type	Single/variable.
Subject to SS deductions	Applicable to Earnings. Define if it will be subject to SS deductions by writing "Yes" or "No."
Currency	Peso/UF
UF Day	uf_dia_9/uf_fin_de_mes
Taxable	Yes/No (Applicable to earnings).
Overtime Base	Yes/No (Applicable to earnings).
Leave Contribution Base	Yes/No (Applicable to earnings).
Bonus Base	Yes/No (Applicable to earnings).
Semana Corrida Base	Yes/No (Applicable to earnings).
Self-Add	Yes/No.
Start Date	The period in which the item ends. Format 'mm-yyyy' if configured for monthly periodicity (e.g., 01-2021), and 'dd-mm-yyyy' if configured for a semi-monthly periodicity (e.g., 16-01-2021).
End Date (optional)	The period in which the item ends. Format 'mm-yyyy' if configured for monthly periodicity (e.g., 01-2021), and 'dd-mm-yyyy' if configured for a semi-monthly periodicity (e.g., 16-01-2021).
Type of Compensation	Type of Compensation for Termination Purposes: "Occasional," "Fixed," or "Variable" (Applicable to earnings).
INE Grouping	INE Grouping for the Monthly Survey, sueldo_base, otros_sueldos_basicos, sueldos_funciones_ocasionales, incentivos, tratos, horas_extraordinarias, comisiones, reembolsos, pagos_no_mensuales, especies, bienestar, aportes_patronales, empleador_bienestar, empleador_capacitaciones, indemnizaciones, otros_costos. (Applicable to earnings).
Payment Register Grouping	Allows grouping payroll items in the Payment Register so that the register can be issued in organized columns grouping common items.
Order in Pay stub	Order of items in Pay Stub
LRE Grouping	Allows selecting the grouping that the item will have in the Electronic Payment Register (LRE). Without this information, the file cannot be correctly generated as it will lack the necessary information for proper reporting. For more information, click on the following link to the User Manual shared by the DT and fill the template with valid (and available) codes on the platform.

Once the template is filled out, upload the file from "Upload File" and wait for the upload to complete.

Required Modules:

Base People Management Essential Plan
Modules: Payroll

Sources of information:

Código del Trabajo, articulo 41. (s. f.). DT - Normativa 3.0.

https://www.dt.gob.cl/legislacion/1624/w3-propertyvalue-145767.html

Código del Trabajo, articulo 42. (s. f.). DT - Normativa 3.0.

https://www.dt.gob.cl/legislacion/1624/w3-propertyvalue-145854.html

Código del Trabajo, articulo 58. (s. f.). DT - Normativa 3.0.

https://www.dt.gob.cl/legislacion/1624/w3-propertyvalue-145728.html

Key words:

Earnings, deductions, importers, structure, items, create, generate, bonus, salary, compensation, pay stub, add item, pay stub attachment, detail, LRE, Payment Register, accounting accounts, option, checkbox.

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