Payroll (PY)
Multiplication of an amount (fixed quantity) by a factor (variable quantity).
Factoring is used in Payroll Accounting to determine a proportional
payment for the employee for a period. (partial period calculations).
Example
Reasons which lead to a reduction in the payment for a period include the following:
- Employee being hired/leaving during the payroll period
- Unpaid absences
- Employee transferring from part time to full time work and his/her basic pay being changed accordingly
- Change in basic pay within a period
- Changes to work relationship and resulting changes to basic pay (for example, if a trainee enters a work relationship)