This guide covers the use of the allocation curve in payroll for distributing cost centers. The guide describes how the allocation curve is formed automatically or manually and how it affects bookkeeping entries.

CONTENT

Use the allocation curve on the payslip to distribute cost centers. Ensure that the total sum of the allocation curve is 100%. The program automatically forms the allocation curve based on the entered working hours' cost object allocations or retrieves the default cost object from the employee's basic data. Note that you can also set a default cost object for individual salary types.

Use of allocation curve

All bookkeeping entries whose salary types are not in the "Tax-exempt allowances for expenses" salary type group are recorded based on the allocation curve's target distribution. Define the salary type group in the path: Pay > Payroll > Salary model management > Company-specific salary types or Holiday calculation methods salary types tab > click on the salary type name > Group:

Payslip-specific allocation curve for directing cost object data

The payslip uses an allocation curve. View the allocation curve from the "Allocation curve" tab of the formed payslip in the payroll process: Pay > Payroll > Payslips and pay periods > Select pay period dates > Select the formed payslip > Allocation curve tab. 

The system automatically calculates the allocation curve during the payslip formation, for example, from working hours, fixed employee cost objects, or selected cost objects for the salary type. You can manually edit the allocation curve. 

Note that the "Allocation curve" tab is empty if no cost distribution has occurred based on the allocation curve. 

When you create a voucher from the payslip for bookkeeping, the cost centers of the payslip's bookkeeping entries rise according to the allocation curve. The allocation curve can also remain empty, but the voucher will still form a cost allocation to the cost object. In this case, a selected cost object is defined for the salary type in the company-specific settings of the salary type. You can see this information on the "payroll accountant's view" tab of the payslip. 

Employer's contribution allocations and holiday pay allocations follow the payslip's allocation curve. 

If you enter new salary type rows on the payslip or edit existing ones that you want to affect the allocation curve data, recalculate the allocation curve by selecting "Update allocation curve". 

Basis for forming the allocation curve

There are several data sources for forming the allocation curve. The allocation curve is formed based on the working hours of hourly or monthly salaried employees. You can set a default cost object in the employee's data, according to which the program distributes the payslip's cost centers to the allocation curve. More information on the topic: Source of cost objects

Working hours data

The euro amount coming to the payslip based on working hours data serves as a weighted basis for calculating the allocation curve (not the hour data).

The working hours data you enter into the calendar for the employee and the cost object selections there guide the formation of the allocation curve. The selected record types, whose record type guidance data is selected to affect the allocation curve, are the basis for the calculation.

  1. Ensure that the record type settings have "Yes" selected as the basis for cost object calculation
  2. Enter hours into the working time entry and select cost objects.
    In the example, 7.5h CO 1 and 7.5h CO2
  3. Confirm and approve the hours, after which you can form the payslip
  4. Check the payslip row details for time work earnings and payable euros.
    In the example, euros total 225e Time work earnings.
  5. Check the "Allocation curve" tab for cost distribution in relation to the payslip's time entries.
    In the example, 50/50
  6. Check the voucher to ensure the allocation curve distributes hourly pay and employer's contributions to cost centers.
    In the example, salary expenses are distributed 50/50, meaning 112.50e CO1 and 112.50e CO2 are allocated to account 5020

 

Example

The company uses two parallel cost object headers with the following object data:

 Region

  • Lappeenranta
  • Helsinki
  • Pori

Function

  • Development
  • Support
  • Sales

 

 

Assume that Esa Example's monthly salary is 1000 euros. If you set the default cost object for the employee as "Lappeenranta", the allocation curve for the payslip will be as follows:

  • Region: Lappeenranta 100%
  • Function: Unallocated

If you give Esa a monthly bonus of 300 euros for the region Pori, add a new salary type row to the payslip and set the object data as "Pori" with a sum of 300 euros.

Select "Update allocation curve", after saving the new salary type row. After recalculating the allocation curve, it will form as follows:

  • Region: Pori 23%, Lappeenranta 77%
  • Function: Unallocated

Now the system compares the object data to the total salary sum, i.e., 300 / 1300 (23.0769%)  and 1000 / 1300 (76.9231%)  from which the ratio distributions are formed. The cost center distribution is visible on the voucher and payroll reports "Cost object statistics". All salary types whose cost object source is "Allocation curve" are distributed according to the percentage distribution to cost objects.

You can find the cost object statistics in the path: Pay > Reports > Payroll reports > Report format: Cost object statistics

If you add object data to other cost object headers, the maximum distribution for each cost object header is always 100%, which is compared to the total salary. In this case, if you want to record a 300 euro bonus as the function "Support", the allocation curve will also have "Function" "Support" 23% and the rest will remain unallocated.

All factors affecting the target allocation curve work with the same logic. The given input data is summed and compared to the total salary (gross pay), from which the allocation curve data is calculated.

Allocation curve with additional calculation

When forming an additional calculation, the program suggests using the original payslip's allocation curve in the "Check selected salary bases" phase. By default, this setting is selected for the additional calculation. If you do not want the original payslip's allocation curve for the additional calculation, remove the selection, save, and form the payslip without cost centers.

 

Allocation curve for time entries with unit as day

If you use record types in working time entries whose unit is day (for example, sick leave), the allocation curve calculation does not automatically convert the length of daily entries into hours but calculates one day as one hour. Therefore, update the formula for these record types to the salary model's daily weekly working hours. For example, if the weekly working hours are 37.5h and the original formula is: Hours x 1 x Hourly pay -> New formula: Hours x 7.5 x Hourly pay. This way, the allocation curve forms the same way as from recorded hours.

Frequently asked questions

Why doesn't the allocation curve form from working time entries for the payslip?

Check that the record type formula is functional.

Pay > Settings > Payroll settings > Record types

The record type settings must have "Cost object source: Yes" selected, and the formula must form a value. For example, the record type "Time work earnings" formula is as follows: "Hours x 1 x Hourly pay = Time work earnings". Check that the employee's salary basis has a value for the "Hourly pay" salary type.

Pay > Personnel > Salary basis management

If it concerns a monthly salaried employee, the record type formula can be as follows: "Hours x 1 x Monthly salary hourly rate = Time work earnings". In this case, check that the payroll settings have a value for the "Monthly salary divider" salary type.

Pay > Settings > Payroll settings > Basic data

Why is the cost object missing from the holiday accrual voucher, even though the employee's payslip has an allocation curve?

For the allocation curve function and cost object formation on the holiday accrual voucher, it is required that the payslip has a value for calculatory (salary in money and gross pay) salary types. If the employee is, for example, monthly salaried with a full month's unpaid absence, meaning the payslip's calculatory values are 0.00 €. The program does not consider it, for example, on the holiday accrual voucher, as the payslip does not have values/euros from calculatory salary types (salary in money, gross pay) from which the program could calculate a cost object-based distribution. In this case, manually add the cost object to the formed holiday accrual voucher.

Keywords

allocation curve, cost center, cost object, payroll, bookkeeping, voucher, payslip, working hours, record types, holiday accrual, employer's contribution allocations

This article has been translated using an AI-based translation tool. The contents or wording of these instructions may differ from those in other instructions or in the software.


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