Creating Absence Element(for Accrual Plan) for integrating Absences with Payroll

Absence Management only talks to Payroll through one bridge: an Absence element. Without it, an Accrual Plan can track balances beautifully in the UI, but nothing about a taken absence — the payment, the liability, the eventual payout — ever reaches a payslip. This post walks through creating that element end-to-end, screen by screen, explaining what each field on the Create Element wizard actually controls, and what Oracle silently builds for you underneath it once you submit.

Navigate to Setup and Maintenance → Elements → Create New Element to get started.

Step 1: Choose the Classification

The very first screen decides the entire template the wizard will use for the rest of the setup.

Field	Value Selected	What It Controls
Legislative Data Group	US Legislative Data Group	Scopes the element to a specific country/legislation's payroll rules — here, the US.
Primary Classification	Absences	Tells the wizard to build an absence-specific element, which is what unlocks the Accrual/Entitlement/Disbursement child-element generation later.
Secondary Classification	Vacation	Further categorizes the absence type (e.g. Vacation vs Sickness) — this drives some of the default behavior and reporting grouping.
Category	Absence (auto-populated)	Read-only, derived from the classification choice above.

Step 2: Basic Information

Next, the wizard asks for the element's identity and the core rules that shape how the absence plan reports and reconciles with payroll.

Field	Value Selected	What It Controls
Name / Reporting Name / Description	Vacation USA	The element's identity throughout the application, payslips, and reports.
Effective Date	1/1/51	Deliberately set far in the past so the element is available for any employee regardless of hire date — a standard Oracle convention for foundational setup objects.
Input Currency	US Dollar	The currency used wherever this element carries a monetary value (e.g. payouts, liability).
What calculation units are used for reporting?	Hours	Decides whether absence duration is reported/stored in Hours or Days for this plan — this must be consistent with how the linked Accrual Plan measures balances.
Work Units Conversion Rule	Assignment Working Hour	Tells the system how to convert an employee's working pattern into hours where a conversion between days and hours is needed, based on their assignment's standard schedule.
What type of absence information do you want transferred to payroll?	Accrual Balances and Absences	The single most important field on this screen. Four options exist: Accrual Balances (only the running balance shows on the payslip, no actual payment), Accrual Balances and Absences (both the balance and the taken absence are transferred, so the employee is actually paid for the leave), Qualification Absences (used for occurrence-tracking, non-monetary plans), and No Entitlement Absences (purely informational, nothing flows to payroll). Selecting Accrual Balances and Absences is what makes this a true payroll-integrated element.

Step 3: Additional Details — Accrual Liability and Balance Payments

This screen configures how unused leave is valued as a financial liability, and how balances get paid out.

Field	Value Selected	What It Controls
Calculate absence liability?	Yes	Enables the system to calculate the monetary value of an employee's unused, accrued balance — typically used for GL costing/accounting of leave liability.
Which rate should the liability balance calculation use?	(left blank here)	Would point to a Rate Definition that determines the per-unit value used in the liability calculation; this is commonly configured after the element is created, once the Rate Definition exists.
Does this plan enable balance payments when enrollment ends?	Yes	Allows the remaining balance to be paid out to the employee when their enrollment in the plan ends (e.g. at termination).
Which rate should the final balance payment calculation use?	(left blank here)	Same idea as above — the Rate Definition used to value the final payout.
How do you want Payout Amount to be taxed?	Regular	Regular taxes the payout like normal wages; Supplemental applies a flat supplemental tax rate instead — relevant for US payroll tax treatment.
Does this plan enable partial payment of balance?	Yes	Allows an employee to cash out part of their balance while still employed, rather than only at termination — this is the "discretionary disbursement" scenario.
Which rate should the discretionary disbursement calculation use?	(left blank here)	The Rate Definition used to value a partial, employee-requested cash-out.
How do you want Cash out amount to be taxed?	Regular	Same Regular vs Supplemental choice, applied specifically to discretionary cash-outs.
Does this plan enable absence donation to donation pools?	No	Leaves leave-sharing/leave-donation functionality disabled for this plan.

Step 4: Absence Payments, Special Rules and Overtime Rules

The final configuration screen covers how absence pay is actually calculated for non-timecard employees, plus a few compliance-related switches.

Field	Value Selected	What It Controls
How do you want to reduce earnings for employees not requiring a time card?	Reduce regular earnings by absence payment	For salaried/exempt staff with no timecard, this decides whether the system simply deducts the standard absence payment from regular earnings, or instead uses a specific rate to calculate the deduction amount.
How do you want Absence Payment to be taxed?	Regular	Tax treatment for the ordinary, in-service absence payment itself.
Does this plan enable entitlement payments after termination?	Yes	Allows any additional entitled amount to still be disbursed after termination processing has occurred — this is what generates the "Entitlement" family of child elements.
Is this element subject to retroactive recoveries?	No	Controls whether retroactive payroll processing will attempt to recover overpayments associated with this element.
Should this element be included in the earnings calculation of the overtime base rate?	No	Excludes absence earnings from the calculation used to determine an employee's overtime base rate (relevant for US FLSA overtime rules).
Should this element be included in the hours calculation of the overtime base rate?	No	Same idea, applied to the hours side of the overtime base-rate calculation.

Step 5: Review and Submit

The Review screen lays out every choice made across all previous steps as a Default Option vs Selected Option comparison — a good last checkpoint before committing, especially useful for spotting where you deviated from Oracle's out-of-the-box defaults (for example, note how several "No" defaults were deliberately changed to "Yes" here to enable balance payments, partial payments, and post-termination entitlement payments).

What Gets Created Automatically: The Child Elements

Clicking Submit doesn't just create one element — it silently generates an entire family of supporting elements needed to process every scenario configured above. Searching for "Vacation US" in Setup and Maintenance → Elements shows the full set:

Child Element Group	Purpose
Vacation US Accrual (+ Calculator, Result)	Drives the liability calculation — the monetary value of the employee's unused accrued balance, feeding accounting/GL costing.
Vacation US Discretionary Disbursement (+ Calculator, Earnings Calculator, Earnings Distributor, Earnings Results, Earnings Retro Results, Result, Retro)	Handles employee-requested payouts — a partial cash-out of balance while the employee is still active, enabled by the "partial payment of balance" setting.
Vacation US Entitlement (+ Calculator, Earnings Calculator, Earnings Distributor, Earnings Results, Earnings Retro Results, Result, Retro)	Supports entitlement payments after termination — generated because that option was set to Yes in Step 4.
Vacation US Final Disbursement (+ Calculator, Earnings Calculator, Earnings Distributor, Earnings Results, Earnings Retro Results, Result, Retro)	Handles the termination payout — the full remaining balance paid out when the employee's enrollment ends, per the "balance payments when enrollment ends" setting.
Retro elements (within each group above)	Process back-dated payouts — adjustments triggered when a retroactive change affects a disbursement, entitlement, or final payout that was already processed.
Vacation US Overtime Only	Feeds the overtime base-rate calculation, relevant only if the overtime inclusion questions in Step 4 had been set to Yes.

Tip: You never process these child elements directly. They exist purely so the payroll engine has a dedicated element for each distinct calculation (accrual, disbursement, entitlement, retro) behind the scenes. Your day-to-day interaction stays with the primary "Vacation US" element and the Accrual Plan it's attached to.

Conclusion

A single pass through the Create Element wizard does a lot of invisible work: one set of Yes/No answers about liability, payouts, and termination behavior determines an entire family of supporting elements generated automatically. Understanding what each field actually switches on — rather than accepting the defaults blindly — is the difference between an absence plan that merely tracks a balance and one that correctly pays, liabilities, and reconciles through Oracle Cloud Payroll.