Dynamics 365 Payroll Calculation Frequencies Explained

Let’s admit, Payroll Calculation Frequencies, available in Dynamics AX 2012 R2 and R3 as well as Dynamics 365, can be confusing!  However, once they have been mastered or demystified, they will be a friend for life!

The pre-requisite to creating and using Payroll Calculation Frequencies, which may add to the confusion, are the Pay Cycles.  The Pay Cycles are created as a means to allow Payroll to be ran for groups of workers.  Those workers in the group are paid on the same schedule.  An example of a Pay Cycle would be one Pay Cycle for Hourly employees which are paid on a weekly basis and one Pay Cycle for Salary Workers that are paid semi-monthly.  The Pay Cycles are associated with the Positions held by the workers.

Once the Pay Cycles are created, then Payroll Calculation Frequencies can be created.  The Frequencies further define the exact pay periods within each Pay Cycle that apply to it.  The Payroll Calculation Frequencies are then assigned to earnings and Benefits to control when those earnings and benefits will be used in determining the workers Earning and Pay Statement for specific pay periods.  An example of a Payroll Calculation Frequency might be one that is defined for use in the first pay period of each month, for a monthly earning or deduction.

The Once-a-Month Payroll Calculation Frequency references each Pay Cycle and is maintained to only include a subset of Pay periods within each cycle in which to apply the earning code or benefit deduction (or contribution).  Shown below is what a once-a-month Payroll Calculation Frequency would look like in regards to a semi-monthly pay cycle and a weekly pay cycle.  During creation of the Payroll Calculation Frequency, each Pay Cycle set of pay periods is reviewed and maintained to contain only the pay periods to be used.  The Payroll Calculation Frequency is then assigned to an Earning Code and/or Benefit when assigned to the employees.

Payroll calculation frequency

Payroll calculation frequencies in dynamics 365

Creating Payroll Calculation Frequencies

Navigate to Payroll > Setup > Payroll Calculation Frequencies

Click New.

creating payroll calculation frequencies

Enter a 15-Charater or less Identifier for the frequency.

Enter a Description.

Click the Drop Down on the Pay Cycle field, and select the Pay Cycle to be maintained for use within the Pay Frequency.

Click the Add button

Add Button

A pop up of the Pay Periods contained in the Pay Cycle selected, will appear.

Pay periods pay cycle dynamics 365

Select the Pay Periods to be included in the Payroll Calculation Frequency being defined by checking to the left of the appropriate periods.

select pay periods

When complete, click the Add button.

Proceed to select another Pay Cycle from the drop down on the Pay Cycle field and repeat the selection and Add process until all Pay Cycles have been reviewed.  If a Payroll Calculation Frequency being created does not apply to a certain Pay Cycle, do not add any pay periods from that pay cycle to the Pay Frequency.

pay cycle review dynamics 365

Note:  It is highly recommended to create an “ALL” Payroll Calculation Frequency to be used with the earnings and benefits that should be included in all pay periods and pay cycles.

Applying the Payroll Calculation Frequency

When working with Benefits, the Payroll Calculation Frequency comes into play when setting up the Payroll Details:

applying payroll calculation frequency

When dealing with Earning Codes, the Payroll Calculation Frequency comes into play when assigning the Earning code to a worker, which will then be taken into consideration when calculating earnings for that worker.

earning codes payroll calculation frequency

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