Payroll Services

A salary commitment is an encumbrance, which is defined as a monetary commitment to future charges against a designated account for a stated period of time. Cornell's Salary Commitment/Encumbrance Calculation provides a tool for financial account managers to project the department's salary needs and future account charges, and remain within the allotted budget.

Salary commitments are calculated at the end of each payroll (biweekly and semimonthly) for all paid employees of type "Exception Hourly (E)" or "Salaried (S)" who have paying, active jobs (includes "leave with pay" employees). Once the data is gathered, it is sent to the General Ledger, Web Financials, and the Accounting Data Warehouse to replace the previous pay run's commitment/encumbrance data.

The commitment/encumbrance amount is calculated using the following three factors:

• Commitment/Encumbrance Period End Date:
  The end date used will be whichever of the following dates is the earliest:

• Account end date or the end of the fiscal year if an account end date is not provided, OR...
• Employee's job termination date, OR...
• The end of the PeopleSoft pay calendar

Note: Code is created and recorded to reflect which of the three dates is used in the calculation.

• Number of Pay Periods:
  The PeopleSoft Pay Calendar is used to determine the number of pay periods remaining between the run date and the encumbrance date determined previously. Partial pay periods will use daily rates, if necessary.

• Period Earnings Rate:
  All projected earnings are determined based on salary/hourly wage, standard hours, and remaining pay periods until the encumbrance end date. The totals are calculated based on each employee's PeopleSoft job account distribution percentage(s) for the beginning of the next pay period, and distributed to accounts accordingly.

Note: Commitments are not calculated for nonoperating accounts (accounts with fund codes such as X1X and X2X).

Each time a pay run is processed (biweekly or semimonthly), the existing encumbrance data for each of the pay groups represented (e.g., ES1 for Endowed semimonthly, EB1 for Endowed biweekly, etc.) is first deleted from the CU_ENCUMB_DTL table, and then replaced with the current pay run's encumbrance data.