Payment modeling

You can use the payment modeling process to perform calculations and create models of employee taxes and other deductions. Examples of these calculations include determining how a change in taxes or other deductions affect an employee's net pay and performing a gross-to-net calculation.

Four payment models are discussed in this chapter. They include:

• Creating a gross-to-net payment model for an existing employee

• Creating a gross-to-net payment model for a hypothetical employee

• Creating a gross-up (net-to-gross) payment model for an existing employee

• Creating a gross-up (net-to-gross) payment model for a hypothetical employee

Gross-up payment modeling is commonly used to calculate an award or bonus as the take-home amount, rather than paying the employee the after-tax amount.

Gross-to-net payment modeling is used to calculate net pay after changes in deductions or gross pay.