VRS Life Insurance Calculations
The salary calculation process retrieves the value in the Pay Rate (payroll.pay_rate) field on the employee’s Pay Rate Information page and calculates the base salary.
Base Salary = (payroll.pay_rate) * (Pay Method) * (Pay Frequency)
Pay Methods
The following table lists the relevant pay methods and database table or valid value.
Pay Method | Database Table or Valid Value |
|---|---|
| payroll.pay_hours |
P - Percent | 1 |
Pay Frequencies
The following table lists the relevant pay frequencies and valid values.
Pay Frequency | Valid Value |
|---|---|
D - Daily | 260 |
W - Weekly | 52 |
B - Biweekly | 26 |
S - Semi-monthly | 24 |
M - Monthly | 12 |
Q - Quarterly | 4 |
A - Annually | 1 |
If a salary exception record exists on the Exceptions page, the employee’s base salary calculation is:
Base Salary = (payroll.pay_rate) * (vavrshour.hours)
Values are rounded up to the next 1000. For example, 24001 becomes 25000.
Deduction or Contribution Calculation
The following table shows how monthly rates and coverage are calculated for each rate type.
Rate Type | Monthly Rate | Coverage |
|---|---|---|
0 | none | none |
1 | (coverage-deduction) * rate | plan factor * rounded salary |
2 | flat rate * plan factor | coverage table * plan factor |
3 | (coverage-deduction) * rate-(all other VRS payments) | sum of coverages in all other plans |
4 | ((plan factor * actual salary)-deduction) * rate/12 | plan factor * rounded salary |
Multiply the resulting amount by 12 to calculate the annual deduction.
Divide that amount by the relevant pay frequency listed in the following table.
Pay Frequency | Divide by |
|---|---|
A | 1 |
Q | 4 |
M | 12 |
S | 24 |
B | 24 |
W | 24 |
D | 24 |
Payroll Deductions
The payroll deduction calculation depends on the following:
Monthly deductions and contributions must not be less than zero.
Rate amounts on the Rates tab are based on the employee’s age.
Coverage amounts on the Coverage tab are based on the employee’s or dependent's age.
Amounts are divided between employees, spouses, and children until exhausted.
Rate Types
The following table lists the rate types for the basic plans:
Type | Employee Type | Spouse Type | Dependent Type |
|---|---|---|---|
Mandatory | 4 | 0 - None | 0 - None |
Voluntary | 1 - Rate Per Thousand | 1 - Rate Per Thousand | 2 - Flat Rate |
Imputed Life | 3 - Per Unit | 0 - None | 0 - None |
Examples
The following example describes how VRS Life Insurance is calculated for a 34-year-old employee opting to cover a spouse and a three-year-old child under Optional Life Plan 1.
The following table lists the employee’s relevant pay settings:
Setting | Value |
|---|---|
Pay Rate | $16.20 |
Pay Hours | 80 |
Pay Method | S - Salary |
Pay Frequency | B - BiWeekly |
The employee’s annual salary = $16.20/hr * 80 hours * 26 pays = $33,696
The amount is rounded up to $34,000
Based on the annual salary, the following are calculated:
Group Life Payroll Deduction
The formula is based on the employee rate type = 4 from the Rates tab.
For example, 0.0028 is the default rate in the Employee Rate field on the Rates tab for the Group Life deductions for ages 0-999 if the employer does not contribute.
Calculation
The amount is calculated as follows:
0.0028 * ($33,696/24) = $3.93
Group Life Coverage
The base salary is rounded up and multiplied by the multiplication factor from the Plans tab.
Calculation
The amount is calculated as follows:
$34,000 * 2 = $68,000
Optional Life Monthly Deduction
The formula is based on the employee rate type = 1, spouse rate type = 1, and dependent rate type = 2 on the Rates tab.
Calculation
The amount is calculated as follows:
$34,000/1000 * 1.0 (emp_factor from the Plans tab) = $34
$34 * 0.09 (employee rate from the Rates tab for age 34) + ($34,000/1000) * 0.5 (sp_factor from the Plans tab) = $17
$17 * 0.09 (spouse rate from the Rates tab for age 34) + 1.0 (dependent plan rate from the Rates tab for age 34) * 1.0 (dependent plan factor from the Plans tab)
Amount = (34 * 0.09) + (17 * 0.09) + 1.00 = $5.59
Optional Life Payroll Deduction
The Optional Life monthly deduction amount is multiplied by 12 and then divided by 24 to get the payroll deduction amount.
Calculation
The amount is calculated as follows:
$5.59 * 12 months/24 pay periods = $2.795
Optional Life Coverage
The formula is based on the employee rate type = 1, spouse rate type = 1, and dependent rate type = 2 on the Rates tab.
Calculation
The amount is calculated as follows:
$34,000 * 1.0 (emp_factor from the Plans tab) = $34,000
+
$34,000 * .5 (sp_factor from the Plans tab) = $17,000
+
$5000 (Coverage tab for age 3) = $5,000
Amount = ($34,000 * 1.0) + ($34,000 * 0.5) + $5000 = $56,000
Total Coverage over $50000
$50,000 is subtracted from the Group Life coverage amount.
Calculation
The amount is calculated as follows:
Amount = $68,000 - $50,000 = $18,000
Over $50000 Monthly Deduction
The formula is based on the employee rate type = 1 from the Rates tab.
Calculation
The amount is calculated as follows:
$18,000/1000 * .09 (employee rate from the Rates tab for age 34 (Rates tab))
Amount = $18 * 0.09 = $1.62
Over $50000 Payroll Deduction
The Over $50,000 monthly deduction amount is multiplied by 12 and then divided by 24 to get the payroll deduction amount.
Calculation
The amount is calculated as follows:
$1.62 * 12/24 = $0.81
Payroll Imputed Income
Imputed income is calculated by subtracting optional monthly and payroll deduction amounts from the over $50,000 monthly deduction amount.
If the value is negative, there is no imputed income.
Calculation
The amount is calculated as follows:
$0.81 – $2.795 - $5.59 = -$2.95