Contribution calculation rates (form) 6.2 CU7 and prior
Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2
Click Payroll > Setup > Benefits > Contribution calculation rates.
Use this form to set the rates for worker deductions and employer contributions for retirement plans.
These rates are used together with the Calculation rate field in the Benefits form to determine the amount of the employer contribution for retirement plans.
Notes
This topic describes functionality that is available only if Payroll for Microsoft Dynamics AX 2012 R2 is installed.
This topic has been updated to include information about features that were added or changed for cumulative update 6 for Microsoft Dynamics AX 2012 and for cumulative update 7 for Microsoft Dynamics AX 2012 R2.
Don’t know what version you’re using? See Découvrez la version de Microsoft Dynamics AX que vous utilisez.
Tasks that use this form
Form-level controls
Buttons |
Information |
|---|---|
New Delete |
Create or delete a contribution calculation rate table. |
Fields |
Information |
|---|---|
Name Description |
The unique name and the description that you use to identify the contribution calculation rate table. |
Tier type |
Select one of the following options:
See the example later in this topic to learn more about tier types. |
Rate controls
Button |
Information |
|---|---|
Maintain versions |
Open the Maintain rate structure versions form, where you can control the effective and expiration dates for contribution calculation rate tables. For more information, see Maintain payroll versions (form). |
Grid columns |
Information |
|---|---|
Worker deduction |
The lowest percentage of a worker’s pay that is matched by an employer contribution at the specified rate. |
Employer contribution |
The matching contribution to an employee’s retirement plan, expressed as a percentage of the employee’s pay or as a percentage of the employee’s own contribution to the plan. The Contribution method field determines how this rate is used to calculate the amount of the employer contribution. |
Contribution method |
This control is not available in versions of Microsoft Dynamics AX 2012 prior to cumulative update 6 for AX 2012. Select the method to use to calculate employer contributions for the selected row. Notes The worker deduction and employer contribution rates are determined by the rate table that is defined in the Contribution calculation rates form and assigned to the benefit in the Benefits form. For more information, see Benefit setup tasks.
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Example
Your organization offers two retirement plans. For Plan 1, your organization matches the worker’s own contributions to their plan at 50 percent up to the first 3 percent, and at 100 percent up to 6 percent. For Plan 2, your organization contributes 1 percent of the worker’s pay to the 401(k) plan when the worker’s own contributions are between 1 percent and 3 percent of their pay; 2 percent when the worker’s own contributions are between 3 percent and 6 percent; and 3 percent of the worker’s pay when the worker’s contributions are 6 percent or more. In this example, your two tables would look like this.
Plan |
Worker deduction rate |
Employer contribution rate |
Contribution method |
|---|---|---|---|
Plan 1 |
0.0000 |
0.5000 |
Percent of employee |
0.0300 |
1.000 |
Percent of employee |
|
0.0600 |
0 |
Fixed percent |
|
Plan 2 |
0.0100 |
0.0100 |
Fixed percent |
0.0300 |
0.0200 |
Fixed percent |
|
0.0600 |
0.0300 |
Fixed percent |
For Plans 1 and 2, the actual amount that the employer contributes depends on the tier type that you select in the Contribution calculation rates form. The following list describes each tier type and includes an example of how the tier types affect the employer contribution amount for Plans 1 and 2.
Single line – Use this tier type to use only one line from the rate table to calculate the employer contribution amount.
For Plan 1, if the worker’s contribution rate is 10 percent of their 1000.00 earnings, the employer contribution is 0.00. For Plan 2, the employer contribution is 30.00 for an employee who earns 1000.00 and whose contribution rate is 10 percent.
Cascading tier – Use this tier type to use multiple lines from the rate table to calculate the employer contribution amount. Only lines that have a deduction rate of less than or equal to the actual worker’s deduction rate are used to calculate the employer deduction amount.
For Plan 1, if the worker’s deduction rate is 10 percent of their 1000.00 earnings, the employer contribution is 45.00. For Plan 2, the employer contribution is 60.00.
The following table lists the formula for calculating the employer contribution amount for Plans 1 and 2 for each tier type.
Plan |
Tier type |
Employee earnings |
Employee deduction amount |
Employer contribution amount |
Formula used to calculate employer contribution amount |
|---|---|---|---|---|---|
Plan 1 |
Single line |
1000.00 |
100.00 |
0.00 |
|
Cascading tier |
1000.00 |
100.00 |
45.00 |
(1000 * 0) + ((1000 * (.06 - .03)) * 0.5) + ((1000 * (.03 - .00)) * 1) = 45 |
|
Plan 2 |
Single line |
1000.00 |
100.00 |
30.00 |
|
Cascading tier |
1000.00 |
100.00 |
60.00 |
(1000 * .03) + (1000 * .02) + (1000 * .01) = 60 |
See also
Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services (LCS).