Payroll Processing. Authoritative Sources: Business Process Standards: Business Rule Standards:

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1 Authoritative Sources: Department of Defense R, Vol. 7A, Chapter 2 Department of Defense R, Vol. 7A, Chapter 29 Department of Defense R, Vol. 7A, Chapter 33 Department of Defense R, Vol. 7A, Chapter 34 Department of Defense R, Vol. 7A, All Chapters Department of Defense R, Vol. 5, Chapter 8 Department of Defense R, Vol. 5, Chapter 24 Department of Defense R, Vol. 5, Chapter 11 Department of Defense R, Vol. 12, Chapter 16 Department of Defense R, Vol. 7A, Chapter 38 Department of Defense R, Vol. 7A, Chapter 48 Department of Defense R, Vol. 7A, Chapter 59 JFMIP SR-99-5 Human Resources & Payroll Systems Requirements, Chapter 14 JFMIP SR-99-5 Human Resources & Payroll Systems Requirements, Chapter 15 JFMIP SR-99-5 Human Resources & Payroll Systems Requirements, Chapter 6 JFMIP SR-99-5 Human Resources & Payroll Systems Requirements, Chapter 7 Joint Federal Travel Regulations, Vol. 1, Chapter 10 OFFM-NO-0106 Core Financial System Requirements, Chapter 11 Department of Defense R, Vol. 5, Chapter 6 Business Process Standards: A business process standard was not directed by law or DoD policy. Business Rule Standards: Payroll_Processing_Business_Rule_03_001 The military payroll system shall support a full range of payroll actions to include starting, changing or stopping pay entitlements, pay deductions, member information or elections with both current and future dates based on: 1. Transaction input from the Human Resource or Payroll specialist 2. Transaction input from external system interfaces 3. Transaction input based on Employee Self Service Page 1 of 12

2 4. Life-cycle events such as accessions, promotion, demotions, separations, assignments and dependency changes, 5. Mass rate changes 6. System future or anniversary effective dates JFMIP SR-99-5 Human Resources & Payroll Systems Requirements, Chapter 14 JFMIP SR-99-5 Human Resources & Payroll Systems Requirements, Chapter 6 JFMIP SR-99-5 Human Resources & Payroll Systems Requirements, Chapter 7 Payroll_Processing_Business_Rule_03_002 To support payroll processing, the military payroll system shall compute pay based on computation segments and pay period begin and end dates as follows: 1. Computation Segment - Computation segments denote a change in the monthly rate or eligibility for entitlements and created when the beginning and ending dates for the entitlement's computation factors (i.e., grade, location, tour pay type, etc.) do not coincide with the pay period's beginning and ending dates. 2. Pay Period Begin Date - The beginning date of a pay period. A pay period is a recurring length of time over which the military member's time is recorded and paid. The pay period's begin and end dates are used in conjunction with the earnings begin and end dates (e.g. Basic Pay and Basic Allowance for Housing) to determine computation segments for payroll computation. 3. Pay Period End Date - The end date of a pay period. A pay period is a recurring length of time over which the military member's time is recorded and paid. The pay period's begin and end dates are used in conjunction with the earnings begin and end dates (e.g. Basic Pay and Basic Allowance for Housing) to determine computation segments for payroll computation. Payroll_Processing_Business_Rule_03_003 To support payroll processing, the military payroll system shall compute gross pay as the sum of each rate of pay times the number of units related to it plus all appropriate allowances and/or other gross pay components. Payroll_Processing_Business_Rule_03_004 To support payroll processing, the military payroll system shall make retroactive calculations based on prior-period period adjustments, changes to an employee s entitlement (for earnings or deductions) or mass table changes. Payroll_Processing_Business_Rule_03_005 To support payroll processing, the military payroll system shall calculate current and/or retroactive adjustments for allowances, premiums and differentials as defined by law or regulation. These may be set dollar amounts or computed as a percentage of pay, applying caps or other limitations when applicable. Page 2 of 12

3 Payroll_Processing_Business_Rule_03_006 The military payroll entitlement and feeder system shall provide automated functionality to generate the reversal of an entire payment schedule or a single payment within a payment schedule based on a single, online action. Generate disbursement-in-transit reversal entries, record the re-established accounts payable, and update related payment records. Payroll_Processing_Business_Rule_03_007 The military payroll system shall automatically compute, recompute or change all entitlements and deductions based on life cycle events, systems changes or administrative changes that update computation, eligibility, accounting or disbursing factors common to one more pay entitlements or deductions. Examples include: 1. Pay Rate Changes (e.g. BP, BAH, COLA, OHA) 2. Location changes (e.g., member, dependents, hostile pay areas, tax exempt areas, CONUS and OCONUS) 3. Dependency changes (e.g., number of dependents or dependent type) 4. Duty Status (e.g. unauthorized absence, desertion, civil confinement, military confinement, excess leave, leave, etc.) 5. Tour Type and effective dates types (e.g. inactive duty tour, short tour and long tour) 6. Tax Rate Changes (e.g. new tax rates from the Federal or State IRS) 7. Deduction Rate Changes (e.g. SGLI, Family SGLI, USSH) 8. FRB changes (e.g. FRB adds or changes to routing transit numbers and account type used for Net Pay or allotments) 9. Life Cycle Changes (e.g., accession, separation, death, promotions, etc.) 10. BAS II payments during leave. PCS, TDY and hospitalization 11. Debt collection (e.g. debt remaining balance reduced to zero) 12. Term Allotment collections e.g. allotment remaining balance reduced to zero) 13. Overseas Housing Allowances Foreign Currency Fluctuations 14. Overseas Cost of Living Allowance Foreign Currency Fluctuations 15. Family Separation Allowance OHA Based Locations Foreign Currency Fluctuations Department of Defense R, Vol. 7A, All Chapters JFMIP SR-99-5 Human Resources & Payroll Systems Requirements, Chapter 6 Joint Federal Travel Regulations, Vol. 1, Chapter 10 Payroll_Processing_Business_Rule_03_008 The military payroll system shall establish and support future dates and amounts to automatically pay initial, monthly installment payments for bonuses, incentive pay and special pays. Department of Defense R, Vol. 7A, All Chapters Payroll_Processing_Business_Rule_03_011 The military payroll system shall support initial or installment payments for bonuses, incentive pays and special pays when the military members fails to fulfill contract or service conditions for which the bonus, special pay or incentive pay was authorized to include: 1. Stopping future installment payments 2. Recouping prior installments payments Page 3 of 12

4 3. Paying future installments Department of Defense R, Vol. 7A, Chapter 2 Payroll_Processing_Business_Rule_03_013 The military payroll system shall compute the daily rate (unit of pay) by dividing the monthly rate by 30 with the result adjusted to the nearest cent, counting one-half cent and over as a whole cent. Payroll_Processing_Business_Rule_03_015 If military service starts or ends on an intermediate day of the month, the military payroll system shall compute pay and allowances for the actual number of days served during that calendar month, but only through the 30th day of that month. Payroll_Processing_Business_Rule_03_017 For reserve members called to active duty, the military payroll system shall compute the pay and allowances for the necessary travel time from: 1. Home to first duty station 2. Last duty station to home (except when released from active duty for retirement, dismissed, discharged from active duty or upon resignation). Payroll_Processing_Business_Rule_03_018 To support the Disbursing process, the payroll system shall support functionality to record disbursement cancellations (payment returns) for individual payments that have not been negotiated. Payroll_Processing_Business_Rule_03_019 If the member dies, the military payroll system shall provide the capability to pay all future bonus, special pay and incentive pay installment payments in the member's final separation pay Department of Defense R, Vol. 7A, Chapter 2 Payroll_Processing_Business_Rule_03_020 The military payroll system shall establish and support future dates and amounts to automatically pay Basic and Standard Cash Clothing Replacement Allowances entitlements. Page 4 of 12

5 Department of Defense R, Vol. 7A, Chapter 29 Payroll_Processing_Business_Rule_03_022 The military payroll system shall compute monthly pay (30 days) by dividing annual salary into 12 equal installments. One installment represents the pay for each calendar month. Payroll_Processing_Business_Rule_03_023 If active military service begins on the 31st day of any month, and the member is on active duty for 30 days or more, the military payroll system shall not pay compensation for that day. Payroll_Processing_Business_Rule_03_024 If any person enters active service during February and serves until the end of the month, the military payroll system shall compute pay and allowances compensation for 1 month (30 days), less the prorated amount for the number of days expired before entry on duty. Payroll_Processing_Business_Rule_03_025 If military service ends before the last day of February, the military payroll system shall compute pay and allowances only for the actual number of days served. Payroll_Processing_Business_Rule_03_026 For members of the Uniformed Services entitled to receive compensation for continuous periods of less than 1 month, the military payroll system shall compute pay and allowances for each day of the period at the rate of 1/30 of the monthly amount of such pay and allowances. Payroll_Processing_Business_Rule_03_028 If the members is obligated to serve on active duty for 30 days or more, but are released before performing such active duty for at least 30 days, the military payroll system shall compute pay and allowances on a day-to-day basis. Page 5 of 12

6 Payroll_Processing_Business_Rule_03_029 For an absence in a non-pay status on the 28th of February, in a non-leap year, the military payroll system shall deduct pay for 3 days. If member is absent only on the 28th day of February in a leap year, the military payroll system will deduct the pay for 1 day - the 28th. If absence occurs on the 29th of February, in a leap year, the military payroll system will deduct pay for 2 days. Payroll_Processing_Business_Rule_03_030 The military system shall consider that no pay is lost for unauthorized absence on the 31st day of the month, except when it is the first day of absence or when the employee is paid for the day under DoDFMR Volume 7A, Chapter 01, Paragraph B.1 Payroll_Processing_Business_Rule_03_031 The military payroll system shall deduct 1/30th of 1 month's pay for each day's absence in a non-pay status. Payroll_Processing_Business_Rule_03_032 To support payroll computation, the military payroll system shall capture the member's tour type and dates as follows: 1. Tour Pay Type - The tour pay type in conjunction with the member's Duty Status used to determine the number of days the military member is authorized pay and allowances for the tour period and if the member is due pay and/allowance during a tour period. For example, drill tour, short tour and long tour. 2. Tour Pay Type Begin Date - The start date of a specific tour pay type 3. Tour Pay Type End Date - The end date of a specific tour pay type. Department of Defense R, Vol. 7A, Chapter 59 CHRIS: Member Inactive Duty Service Start Date-Time Member Inactive Duty Service Stop Date-Time Member Reserve Component Active Duty Start Date Member Reserve Component Active Duty Stop Date Member Reserve Component Active Duty Type Payroll_Processing_Business_Rule_03_032_01 For active duty long tours (tours of 30 days or greater AKA Extended Active Duty Tours), the military payroll system shall compute pay and allowances the entire period as if each month had 30 days and the daily rate is determined as 1/30 of the monthly entitlement rate. For example: The 31st day of the month of any month Page 6 of 12

7 is not paid. Payroll_Processing_Business_Rule_03_032_02 For active duty short tours (tours less than 30 days), the military payroll system shall compute pay and allowances based on the actual days during the pay period and the daily rate is determined as 1/30 of the monthly entitlement rate. For example: The 31st day of the month of any month is paid is the member is on active duty on the 31st day of the month Payroll_Processing_Business_Rule_03_032_03 For inactive duty training tours (drill tours), the military payroll system shall compute pay and allowances based on the number of drill periods reported for the day. The daily rate is determined as 1/30 of the monthly entitlement rate and the member is paid the daily rate for each drill period (inactive duty training of not less than 2 hours). For example: If the member serves two drill periods in one calendar day, then the member is paid for 2 days. See exceptions for: 1. Muster Duty Allowance 2. Electronic Screening Allowance 3. Funeral Honors Duty Allowance 4. Basic Allowance for Subsistence In Kind Payroll_Processing_Business_Rule_03_032_04 When a member is on a short tour (active duty less than 30 days) and is continued on active duty for 30 days or more by new orders or an amendment to the original orders, the military payroll system shall compute pay and allowances based on a long tour as if each month had 30 days and the daily rate is determined as 1/30 of the monthly entitlement rate. For example: The 31st day of the month of any month is not paid Payroll_Processing_Business_Rule_03_032_05 For Muster Duty Tours, the member is paid Muster Duty Allowance and is not authorized pay and allowances Payroll_Processing_Business_Rule_03_032_06 For Funeral Honors Duty Tour, the member is paid Funeral Honors Duty Allowance and is not authorized pay and allowances. Page 7 of 12

8 Payroll_Processing_Business_Rule_03_032_07 For Electronic Screening Duty Tour, the member is paid Electronic Screening Duty Allowance and is not authorized pay and allowances. Payroll_Processing_Business_Rule_03_032_08 For active duty short tours without Pay and Allowances (tours less than 30 days), the member is not due pay and allowances Payroll_Processing_Business_Rule_03_032_09 For active duty short tours without Pay (less than 30 days), the member is not due pay, but is authorized Basic Allowance for Subsistence (BAS) Cash Commutation Payroll_Processing_Business_Rule_03_032_10 For inactive duty training tours without Pay (drill tours), the member is not due pay or allowances Payroll_Processing_Business_Rule_03_036 For members of the Reserve and Guard components, the military payroll system shall not pay for more than 360 days in a year, when so directed based on actual entitlement if the total is based on a combination of active duty pay, extended active duty and inactive duty training compensation Payroll_Processing_Business_Rule_03_037 To prevent a loss of funds, the military payroll system shall not allow users to retroactively change or stop payroll deductions and refund payments if these deductions have been disbursed to the member or other recipient (check, EFT, IPAC or cash payment). Instead, the erroneous payment must be reported to the Disbursing Office for investigation or processing. The Disbursing Office will voucher the payment return then process the credit to the members pay account. Examples include: 1. Allotment payments 2. Debt Payments 3. Tax Payments 4. SGLI payments 5. Net Pay Page 8 of 12

9 6. Partial or Advance Payments 7. Montgomery GI Bill Payments (Standard and Additional) 8. TSP Payments 9. Returned Bonds Department of Defense R, Vol. 5, Chapter 11 Department of Defense R, Vol. 5, Chapter 24 Department of Defense R, Vol. 5, Chapter 6 Department of Defense R, Vol. 5, Chapter 8 Department of Defense R, Vol. 7A, Chapter 42 Department of Defense R, Vol. 7A, Chapter 43 Payroll_Processing_Business_Rule_03_038 The military payroll system shall compute and report the military pay retired pay accrual for each pay period 1. Calculations are based on retired pay accrual percentages published annually by the Office of the Secretary of Defense (OSD) times the total basic pay amount calculated for the pay period. 2. Separate totals are computed for Active Duty, Reserve, and National Guard personnel based on full-time or part-time duty 3. Retired pay accruals are reported on the payroll accounting interface 4. The retired pay accrual does not increase the member's Gross Pay, nor is it disbursed to the member Department of Defense R, Vol. 12, Chapter 16 Department of Defense R, Vol. 12, Chapter 16 CHRIS: Member Reserve Component Active Duty Type Member Uniformed Service Component Type Payroll_Processing_Business_Rule_03_039 To support payroll processing, the payroll system shall ensure payroll deductions such as allotments, taxes, debts and garnishments do not exceed the military member's gross pay (exception: SGLI arrears) Payroll_Processing_Business_Rule_03_040 The military payroll system shall not pay, Pay and Allowances unless the member is also authorized Basic Pay for the same period of time. See exceptions for: 1. Muster Duty Allowance 2. Electronic Screening Allowance 3. Funeral Honors Duty Allowance 4. Basic Allowance for Subsistence In Kind or Cash Commutation 5. Basic Allowance for Housing With Dependents for members in Non-Pay Status 6. Overseas Housing Allowance With Dependent for members in Non-Pay Status Page 9 of 12

10 7. Basic Allowance for Housing With Dependents to Surviving Dependents 8. Overseas Housing Allowance With Dependent to Surviving Dependents 9. Incapacitation Pay Joint Federal Travel Regulations, Vol. 1, Chapter 10 Payroll_Processing_Business_Rule_03_041 The military payroll system shall not pay members of the Reserve and Guard component for inactive duty training performed on a day on which he or she is also entitled to basic pay for active duty or active duty for training, or on a day on which entitled to Muster Duty Allowance (MDA). Payroll_Processing_Business_Rule_03_043 The military payroll system must interact with core financial systems to support payroll adjustments and regular calculations that cross fiscal and/or calendar years, and provide needed information to the core financial and other information systems. Payroll_Processing_Business_Rule_03_045 To support payroll computation, the military payroll system shall capture and retain the member's duty status in order to determine if pay and allowances are authorized for the member's tour of duty as follows: 1. Duty Status - Member Duty Status captures the state of a DoD Military Service member relevant to his or her availability for duty; (i.e. confinement, separated, deceased, Unauthorized Absence, desertion, excess leave, etc.). The member's duty status is used with the Tour Pay Type to determine if the member is authorized pay and allowances for such duty status and the number of days payable 2. Duty Status Begin Date - The start date for which a specific duty status is ordered or authorized. Use to determine the begin and end dates for the member's pay and allowances 3. Duty Status End Date - The stop date for which a specific duty status is ordered or authorized. Use to determine the begin and end dates for the member's pay and allowances Payroll_Processing_Business_Rule_03_045_09 If the member's duty status is Service Essential to Public Service and during the period of retention, except in time of war, members are entitled to regular pay and allowances, plus a 25-percent increase in the basic pay, to which they were entitled on the day before the period of retention began Page 10 of 12

11 Payroll_Processing_Business_Rule_03_045_11 If the member's duty status is parole (released from a disciplinary barracks), then the member is considered to be in an authorized leave status and is entitled to pay and allowances to the extent the member has unused accrued leave to the member's credit, less any fines and forfeitures still remaining in effect. Once the member's accrued leave has been used, the member is considered to be in an excess leave or leave without pay status and is not entitled to pay and allowances during this period Department of Defense R, Vol. 7A, Chapter 48 Payroll_Processing_Business_Rule_03_045_14 If the member's duty status is Present for Duty, the member is entitled to pay and allowances based on their applicable tour pay type Department of Defense R, Vol. 7A, Chapter 38 Department of Defense R, Vol. 7A, Chapter 59 Payroll_Processing_Business_Rule_03_046 The military payroll system shall compute and report the Medicare-Eligible Retiree Health Care Fund accrual for each pay period 1. Calculations are based on the expected average force strength during the fiscal year, multiplied by the normal cost per-capita rates published annually by the DoD Medicare-Eligible Retiree Health Care Fund Board of Actuaries. 2. Separate totals are computed for Active Duty, Reserve, and National Guard personnel based on full-time or part-time duty. 3. Medicare-Eligible Retiree Health Care Fund accrual are reported on the payroll accounting interface. 4. The Medicare-Eligible Retiree Health Care Fund accrual does not increase the member's Gross Pay, nor is it disbursed to the member. Department of Defense R, Vol. 12, Chapter 16 Department of Defense R, Vol. 12, Chapter 16 CHRIS: DoD Military Pay Entitlement Rate Start Date DoD Military Pay Entitlement Rate Stop Date DoD Military Pay Entitlement Rate Type Member Reserve Component Active Duty Type Member Uniformed Service Component Type Payroll_Processing_Business_Rule_03_047 The military payroll system must be customizable to meet agency-defined business practices. Agency customizable features must be table/parameter driven; for example: 1. Military Pay Rate Tables 2. State Tax Code Tables 3. Foreign Currency Rate Table 4. Recipient ID Code Tables 5. Basic Allowance for Housing Military Housing Area Code Tables 6. Accounting Tables Page 11 of 12

12 7. Domain Value Tables Appendix A: Common Human Resource Information Standards DoD Military Pay Entitlement Rate Start Date DoD Military Pay Entitlement Rate Start Date is the calendar date on which a DoD military pay entitlement rate type begins. DoD Military Pay Entitlement Rate Stop Date DoD Military Pay Entitlement Rate Stop Date is the calendar date on which a DoD military pay entitlement rate type ends. DoD Military Pay Entitlement Rate Type DoD Military Pay Entitlement Rate Type is the classification of a DoD military pay entitlement rate. Member Inactive Duty Service Start Date-Time Member Inactive Duty Service Start Date-Time is the calendar date and time of day in which a DoD Military Service member's inactive duty(id) service period begins Member Inactive Duty Service Stop Date-Time Member Inactive Duty Service Stop Date-Time is the calendar date and time of day in which a DoD Military Service member's inactive duty (ID) service period ends. Member Reserve Component Active Duty Start Date Member Reserve Component Active Duty Start Date is the calendar date on which a Reserve Component DoD Military Service member's period of active duty begins. Member Reserve Component Active Duty Stop Date Member Reserve Component Active Duty Stop Date is the calendar date on which a Reserve Component DoD Military Service member's period of active duty ends. Member Reserve Component Active Duty Type Member Reserve Component Active Duty Type is the classification of an active duty period for which a Reserve Component DoD Military Service member performs. Member Uniformed Service Component Type Member Uniformed Service Component Type is a specific category of a Uniformed Service Branch in which a DoD Military Service member is affiliated. Page 12 of 12