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factoring

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)