In Workday HCM, period salary plans are specifically designed to support compensation structures where base pay is distributed over a defined number of periods that may not align with standard monthly or annual salary conventions. This is particularly important for countries such as Italy, where statutory or customary compensation practices include additional salary payments, often referred to as the 13th and 14th month salaries. These additional payments result in employees receiving more than 12 months of pay within a year.
A period salary plan allows organizations to define the number of salary periods per year, such as 12, 13, 14, or other values like 14.9, without altering the employee’s annualized base pay. This ensures compliance with local labor laws while maintaining consistent reporting, budgeting, and payroll calculations. Workday then prorates or distributes the annual amount appropriately across the defined periods.
Other plan types do not support this requirement. A salary plan assumes a standard annual salary without accommodating extra pay periods. Hourly plans are designed for workers paid based on time worked, and unit salary plans are used when pay is based on output or units produced, neither of which align with Italy’s statutory base pay structure.
Therefore, a period salary plan is the correct and Workday-recommended solution for handling additional months of base pay in countries with localized pay practices, making option A the correct answer.
