How to calculate the earnings amount using the average of the months?

An earnings item can be calculated based on the average of the amounts paid monthly.

To create an earnings item of this type, you should select the Average Earnings from the Last Months option in the Formula field. When this formula is chosen, the system makes the Average Earnings tab available, where you must specify the following data:

• The number of months to consider when calculating the average;

• The type of amount to consider: Processed Amount or Value Subject to Social Protection Deductions;

• The earnings items paid in those months that will be taken into account when calculating that average.

If an earnings item is not specified, even if it was ever paid in the months in question, it will not be included in the calculation of the desired average.

You can also exclude the months closest to the calculation date from the average. In the Administrator (under Parameters of the Financial Year | General), you can set a parameter to allow excluding the number of months immediately prior to processing.

Example

The Administrator has the following data specified:

• The Months not to consider for the average… parameter is set to 2;

• The type of amount to consider is Unit Value;

• The formula used is Average Earnings from the Last Months with a value of 65%, and the average considering 6 months.

This means the earnings average will be calculated based on the specified earnings items from the last 8 (6+2) months, excluding the 2 months closest to the processing date.

Since a percentage was set on the earnings item, the system only considers 65% of the amount when calculating the resulting average.