Payroll BS 7 0 Presentation vFINAL

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1PAYROLL TRAINING© Copyright Capgemini 2008 All Rights Reserved

Payroll

BS 7.0 Certification Training

December 4th 2009

Presented by:

Nabil Rehman

Swati Halady

Ravi Kambhampati




2

Course Agenda

Time

Unit 1 Payroll Basics 00:20

Unit 2 Payroll Schemas, Functions, and

Personnel Calculation Rules

00:20

Unit 3 Starting Payroll 00:20

Unit 4 Wage Type Valuation 00:30

Unit 5 Absence Valuation 00:20

Unit 6 Time Wage Type Selection 00:20

Unit 7 Averages 00:20

Unit 8 Factoring 00:30

Unit 9 Cumulation Wage Types 00:30Unit 10 Retroactive Accounting 00:30

Total Hours 4 hours




Unit 1: Payroll Basics




4

Overview of Payroll Organization

control recordcontrol record

Are assigned to

the payroll area

For every

payroll area there

exists a

PeriodPeriod

parametersparametersDateDate

modifier modifier and

For every combination

of period parameters

date

modifier

PayrollPayrollperiodsperiods

and

Monthly or

weekly?

Additional

date types

Which payroll year,

start, end of periods

Calendar for Calendar for

cumulationscumulations

Cumulation of wage

types for report purposesControls the individual

stages of payroll




5

Payroll Organization

A period parameter and a date modifier are assigned to each payroll area. The period

parameter determines whether payroll is run monthly, bi-monthly, and weekly. Each periodparameter used is assigned to a time unit. The values for the time units are defined (monthly,semi-monthly, weekly, bi-weekly, every four weeks, and annually.)

Payroll periods must be generated for each combination of period parameters and datemodifiers assigned to a payroll area. All periods within the specified time interval are definedbased on the period parameter. The start date and end date for each period is defined andthe payday is calculated using a rule entered as a parameter. The payroll year and perioddefine the exact dates for the payroll period.

You must create a control record for every payroll area. This control record controls theindividual stages of payroll.

All employees in the same payroll area have the same – payroll begin date, end date, checkdate and are processed through payroll together.

The SAP HR System uses payroll areas to group together employees for whom payroll is runat the same time, and also to set the dates for the payroll period. Employees from differentemployee subgroups can belong to the same payroll area.

For example, an organization may pay employees on a monthly and weekly basis so at leastone monthly and one weekly payroll area must be created. You must also create payroll areasif you want to run payroll for employees at different times.




6

Wage Types

Wage Types:

Various types of payments and deductions are called Wage Types in SAP Wage types can be set up to be specific to each Personnel Sub-Area (PSA) and based on

permissibility. For example, an employee in HR might not be entitled to “Clothing Allowance”;

therefore, those Wage Types will not be permissible to the Personnel Sub-Area and Sub- Areas.

Wage type concept in SAP

Wage types are country specific configuration. Best Practice: Globalize wage type numbers,but attributes are unique for each country.

SAP delivers model wage types which customer can copy.

SAP model wage types start with Letter, customer wage types should start with number.

Wage types consist several fields containing various information.

The RTE field specifies, for example, the hourly rate used for hourly wage types. With time wage types, the NUM field initially specifies hours overtime, for example. To

determine the time wage type amount, the system multiplies the number by the rate, andstores the result in the AMT field. The rate for time wage types is calculated according to theconditions defined in Customizing.

With basic pay wage types, such as salary, the amount is stored in the AMT field


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Wage Type used as Amount in Basic Pay Infotype 8




8

Wage Type used as Hours in Infotype 2010




9

Validity period of wage type characteristics

Each wage type contains a sequence of time-dependent characteristics that determine how

the wage type is treated during the payroll run. The characteristics that are stored enable youto control how wage types are processed during payroll.

If wage type characteristics change, it does not suffice to simply change the correspondingtable entries. Instead, the validity periods of existing entries must be delimited, and newentries created with the characteristics required in the future. This is best practice.

If you change the wage type characteristics of a previous payroll period, you must correct all

subsequent payroll results. As the system does not automatically recognize such changes,you must force retroactive accounting runs for the relevant employees and payroll periods.This should be avoided.

Primary wage types are either entered into the system directly by the user (for example, basicpay) or generated by the system based on time data (for example, time wage types calculatedfor overtime).

During the payroll run, the payroll program creates secondary wage types. For example, allamounts to be paid are cumulated into the secondary wage type Total Gross (/101) during therun. SAP delivers secondary wage types identified by a name starting with /.




10

Wage type table T512W




11

Wage type table T512W




12

Wage type characteristics – Table T511 (Country specific).




13

Wage type characteristics – Table T511 (Country specific).




14

Wage type configuration

IMG > Payroll > Payroll: USA > Basic settings > Environment for maintaining wage types >Create wage type catalog

Transaction Code : OH11




15

Wage type configuration




16

The SAP Payroll Concept




17

The SAP Payroll Concept

Payroll is run by a country specific program/driver called, RPCALCX0. The X is replaced by

the country code, for example for the US it‟s RPCALCU0.

This payroll program calls a country and client specific schema. The standard is #000 whichcan be copied and updated for client specific rules. The international schema is X000, USschema is U000, etc.

A customer-defined schema and the functions included in that schema affect flow control inthe payroll driver.

A function calls the function module assigned to it in the payroll driver. Certain functions alsocall personnel calculation rules containing operations that are linked to operation modules inthe payroll driver.

During the payroll run, function and operation modules access entries stored in Customizingtables.




18

Payroll Process




UNIT 2: PAYROLL SCHEMAS, FUNCTIONS,

AND PERSONNEL CALCULATION RULES




20

Payroll Schema

• Payroll is processed using a payroll driver and a payroll schema.

• The payroll driver runs the sequence based on the tasks specified by the schema.

• The payroll schema defines the payroll processes carried out by the payroll driver.

• The payroll schema gathers all the data required to run payroll for an employee in a specifiedperiod.

• Payroll driver accesses the payroll schema which in turn accesses the payroll functions andsub-schemas.

• Payroll functions access function modules, operations that access operation modules or rulesthat access operations.

• All these modules access the customizing tables.

• A main schema must be executable and can be used directly as a parameter in the payrolldriver. The standard system includes an international payroll schema (X000) and differentcountry-specific schemas.

• If payroll schemas exist for a country, the country-specific indicators are used in the schemanames in the standard system i.e. payroll schema for USA is U000 where „U‟ is the country

specific indicator for U.S.




21

Payroll Schema




22

Subschema

Subschemas are schemas accessed by the COPY function within another schema. They can beaccessed from a main schema or subschema. Subschemas are used to carry out subtasks for

Payroll Evaluation.




23

Subschema

This subschema comprises the following main steps:

1. Specify the type of program type (payroll or time)

2. Set switch for database updates (YES/NO) All database updates are controlled via thisswitch (otherwise simulation)

3. Only infotypes from the HR master record which apply to the selected personnel number areread.

4. All Time Management infotypes are imported.

5. Specify check against control record PA03 (test or live).

Creating a schema or a sub-schema

You can create your own schemas or change existing schemas to adjust them to individualrequirements. The assignment of names for standard and customer schemas describes how youshould call your newly created or changed schemas. SAP recommends that you use the

following characters at the start of the schema name:

Figures

Round parentheses

The characters Z and Y

When assigning a name, you should not use the special characters ! % $ * +




24

Subschema

Schema Editor

• You can call up the editor for personnel calculation schemas as follows:

• From the SAP Easy Access screen, choose Human Resources -> Payroll -> <country> ->Tools -> Customizing Tools -> Schema.

• From the SAP Easy Access screen, choose Human Resources -> Time Management -> Administration -> Tools -> Maintain Schemas.

• Transaction code PE01




25

Functions

• Functions are elements of personnel calculation schemas.

• Functions retrieve and process the data required for each processing step.• Certain functions call a personnel calculation rule. The relevant calculation rule processes

the data retrieved by functions.

• A personnel calculation rule (PCR) consists of separate operations and always processeslogical units.




26

Functions




27

Functions

Example of a Function

Function PIT calls a personnel calculation rule which processes the contents of the IT according

to designated rules. Each wage/salary type from the IT is processed according to the PCRs.PCRs generally change the wage/salary type (for example, valuation, cumulation) and store thechanged wage/salary type in an output table.




28


• Personnel calculation rules are the statements for the execution of defined tasks in Payroll.

• Personnel calculation rules (or rules) consist of one or more operations. They consist of

statements for calculating values in the payroll run and define the sequence of thesestatements.

• Rules have a decision tree structure. A rule is called within a schema to process specialsubtasks.

• Each step within a rule corresponds to one operation. Further rules can be accessed viaspecial operations. These are known as subrules.

• A rule can consist of several subareas. The subareas are defined for a specific combination of employee subgroup groupings for personnel calculation rules and wage types or time wagetypes. A subarea has the same attributes as the complete rule.

Example of a Personnel Calculation Rule

The international calculation rule Recurring Payments and Deductions and SupplementaryPayments (X011) reads the Recurring Payments /Deductions (0014) and SupplementaryPayments (0015) infotypes. The rule places the wage types included in these infotypes in thewage type table (OT) for further processing.




29





30





31


•Personnel calculation rule X011 is called by the functions P0014 and P0015.

• After importing the infotypes 0014 Recurring payments/deductions 0015 (supplementarypayments), the wage types entered there are placed in the internal wage types table OT for further processing. Special processing can be triggered via the coding used for these wagetypes in processing class 47.




Unit 3 : Starting Payroll




33

Overview of Payroll Process

Run payroll ok?

Release Payroll

Start payroll

Corrections

NO

Change master data

Exit Payroll

Subsequent activities in

payroll

YES

Release for correction

Release for payroll

Release for payrollFunction in menu

Control record status

Legend:

Exit payroll




34

Payroll Process

During the payroll run, master data and time data changes that affect the payroll past and payrollpresent are not permitted. The payroll program reads the master data and time data infotypes,

which means that changes effected during the payroll run could jeopardize the accuracy of thepayroll results. It also means that you must not run payroll during master data maintenance. Thisis controlled by the payroll control record.

Release Payroll

It prevents master data change in past or present. This lock applies to the personnel numbers

included in the payroll area concerned. Changes that affect the future are still permitted. Youmust execute this function before starting the payroll.

Start Payroll

This step calculates payroll for the specific period for the specified payroll area. Payroll resultsare saved to clusters in SAP. This data can now be reported on using standard and custom SAPpayroll reports. Payroll simulations can also be run on a daily basis for validating payroll results

for example missing HR data, wrong tax authority etc.




36

Initializing Payroll

At the start of the payroll run, subschema XIN0 provides the payroll driver with the datarequired to run the payroll program.

Function PGM provides the payroll driver with data on the type of program the schema uses.The different schemas allow the payroll driver to execute the functions of diverse programs runat various times during processing. To execute the payroll program, the function must be set toparameter ABR.

Function UPD controls whether the payroll results are updated on the database or onlyavailable during the payroll run. If the payroll driver has been set to test run, function UPD will

not update the database even when set to YES.Function OPT set to the parameter INFT ensures that only the infotypes required in thefunctions within the schema are imported. The parameter TIME enables all time infotypes to beimported. This function is designed to enhance performance.




37

Payroll Schema




38

Control Record

You must create a control record in Customizing for each payroll area before it can be used.

The personnel control record performs the following functions in payroll:

•Defines the payroll past for retroactive accounting recognition.

•Locks master data and time data so no changes can be made during the payroll process.The lock is valid for the payroll past and the payroll present. Changes affecting future

payroll runs are still possible.•Defines the earliest possible retroactive accounting date for each payroll area.

•You can use transaction code PA03 to create control record.

•You must pay particular attention when creating the payroll control record in your livesystem. The payroll period used to create the payroll control records must be 1 periodbefore the period in which you want to go live.




39

Control Record




40

Function CHECK set to parameter ABR

Function CHECK set to parameter ABR ensures that:

• Payroll is only run for the employees in a payroll area that has been released for payroll.

• Payroll is not run for any employees with payroll results relating to the future.

• In a live payroll schema, function CHECK ABR must be activated. The function is deactivatedby setting the program to test run.

Abrechnungsschema:

XIN0

Control record

Released for payroll

Released for correction

Exit payroll

Check payroll results

Payroll period 10.1998

Run 01

XIN0..

CHECK ABR.

Initialization INTERNATIONAL

Check against PA03




41

Payroll Periods

Generate payroll periods

• A payroll period determines the period for which a payroll result is created. The length of

payroll periods can differ; for example, a payroll period can be a month, a week, or fourteen days.

• The exact start date and end date of the periods must be defined for the payroll areas.

• This data is generated automatically when the program is started.

• Payroll periods are linked to the time units using the 'Generate Payroll Periods' step inthe Implementation Guide (IMG).

• Payday rule / Number of days: These two fields determine how the period payday iscalculated.

The following values can be used for the payday rule:

• 1: The number of days is added to the start date of the period to calculate the payday.

• 2: The number of days is deducted from the end date of the period.

• 3: The number of days is added to the end date of the period.




42

Payroll Periods




43

Importing Basic Data

Schema XBD0 is a subschema used to read the basic data that is essential to payroll.

COMBLOCK

ENAMEWPBPGONBLOCK

Basic data INTERNATIONALEdit basic data

Determine name of EERead work center/basic pay dataContinue if data completeEdit basic data

BEG

END

INTERNATIONAL Gross wage calculationand transfer

Initialization of payroll

Edit basic data

Import last payroll results

Gross remuneration (Time Management)

Import additional payments/deductions

Partial period factoring and storage

Cumulate net amount/form payment amount

Retroactive Accounting

Net payments/deductions and transfer

Final processing

XIN0

XBD0

XLR0

XT 00

XAP9

XAL9

XNA9

XRR0

XNN0

XEND




44

WPBP Splits

• Various partial periods can contain different data. Where this is the case, the different entriesare assigned a split indicator in internal tables WPBP and IT.

• In this example, a new employee's basic pay and planned working time have been changedduring the payroll period. The system creates an entry in table WPBP for each partial periodof the payroll period.

WPBP

IT 0000

Personnel Actions01.JUL.1991 - 15.JUL.199916.JUL.1999 - 31.DEC.9999

IT 0007

Planned Working Time01.JUL.1999 - 20.JUL.199921.JUL.1999 - 31.DEC.9999

IT 0008

Basic Pay01.JUL.1999 -15.JUL.199916.JUL.1999 - 31.DEC.9999

M020 01 3,000.-

M020 02 3,500.-

M020 03 3,500.-

......

01 01.JUL.1999 15.JUL.1999

Table ITTable WPBP

Action

Personnel areaWork schedule rule

Hiring

1000NORM

02 16.JUL.1999 20.JUL.1999

Action Change in pay

03 21.JUL.1999 31.JUL.2000Work schedule rule FLEX




45

Data Completeness

Function GON checks whether all the master data has been imported. Further processing of thepersonnel calculation schema only occurs if certain data is available. Checking procedures vary

from country to country. If not all the data is there for payroll to be run, will get an error.

GON Is all the data

complete?

Payroll




UNIT 4: WAGE TYPE VALUATION




47

Wage Type Valuation

• During the payroll run, the system reads various time wage types from tables. These timewage types contain only one number (NUM). To calculate the amount (AMT) of the time wage

type, the number must be multiplied by a rate (RTE). The system calculates the rate for eachunit

RTE * NUM = AMT

Example:

• An employee has worked 10 hours. You enter the time data manually for him. The valuationbasis for this wage type is USD 20.00. The employee therefore receives USD 200.00

remuneration.

20.00 * 10 hrs = 200.00

• The method of calculating this within SAP is known as the wage type valuation base.

Valuation bases can be used for number of different ways to process rates within the payrollschema.




48

Wage Type Valuation

A time wage type can be valuated using:

• Fixed amounts

• According to organizational units

• According to the provisions in collective agreement

• Using a value derived from the employee‟s basic pay data

• Types of Valuation Bases

• Valuation bases that are entered in a table as:

• Constant dependent on wage type

• Constant dependent on a collective agreement

• Valuation bases calculated for specific persons using basic pay data.




49

Wage Type-Dependent Constants

In payroll, a wage type can be valuated using a constant amount. The amount does not dependon the employee's organizational assignment or on any other characteristics. This type of

valuation is used for fixed amounts. In this step, you determine the values for constantvaluations, which are wage-type dependent. A single wage type can have multiple validityperiods.

Example: A company pays same bad weather bonus to all the employees.

IMG Menu Path:

Payroll International Time Wage Type Valuation Valuation Bases Constant Valuation

Bases Constants dependent on wage types Click the Determine Constant Valuation Wage Type.




51

Pay Scale-Dependent Constants

This process is used when the constant valuation basis is based on collective agreement. If wage types are subject to constant valuation depending on their pay scale level assignment, you

must define the values for each pay scale level assignment and wage type.Example: A company pays different hourly rate depending on day and night shift.

IMG Menu Path:


Bases Constants dependent on the pay scale




52

Modifiers for Table Access

This process is used when employee remuneration vary depending on the organizational unit.

Example: A company pays referral bonus depending on the personnel area. Bonus wage type

4000 to be remunerated differently for employees in personnel area 1000 than for employees inpersonnel area 1100.

IMG Menu Path:


Bases Constants dependent on wage types

Follow the steps as explained in the Wage Type-Dependent Constants section.

Maintain the PMOD (Payroll Modifiers) fields as required. In this example PMOD value 01 and02 corresponds to personnel area 1000 and 1100 as these are the values we are going to use inpersonnel calculation rule XMOD to extract the different hourly rate for bonus.




53

Modifiers for Table Access




54

Personnel calculation rule XMOD

Personnel calculation rule XMOD is modified as per requirement to achieve this.

Go to transaction code PE02

Copy the XMOD rule and modify as per the requirement.




55

Personnel calculation rule XMOD

Add the organization unit as required. In this example Personnel Area is used as criteria for bonus calculation. So add personnel area 1000 and 1100. Once they are added use MODIF 2

function for constant wage type valuation. Maintain the values of MODIF 2 for personnel area1000 and 1100 from the Wage Type-Dependent Constants screen i.e. 01 and 02 respectively.

E OUTWPPLANT

E 1000

MODIF A = 01

Employee grouping for payrollXMOD

E ****

MODIF 1 = 01

MODIF 2 = 01

MODIF A = 02

MODIF 1 = 02

MODIF 2 = 02

E 1100

3E UsingUsing ESES groupinggrouping 3 wage/3 wage/time type **** astime type **** as anan exampleexample

Personnel area

Table Absence valuation

Table Wage type selection rule

Table Constant wage type valuation




56

Assigning Valuation Bases

In this process you can valuate wage type based on other wage type.

Example: A company pays overtime according to the employee‟s personal hourly rate and

bonus.IMG menu path:

Payroll International > Time wage type valuation > Valuation Bases > Assign valuation bases




57

Assigning Valuation Bases

The first and second derived wage types enable you to define bonus wage types for whichremuneration is calculated when an employee's current wage type is valuated in payroll.

You can determine whether remuneration is calculated for the current wage type by specifying avaluation basis in the appropriate line.

As in this example wage type 1205 (over time) is valuated on 25% of wage type 1003 (payperiod salary). It will be calculated as follows:

Wage type 1205 before valuation has 5 hours in AMT field.

After valuation :

Wage type 1205 = 5 * regular hourly rate + 5 * (25% hourly rate of wage type 1003)




UNIT 5: ABSENCE VALUATION




59

ABSENCE VALUATION

This component is used to define regulations to determine how absences (unpaid leave, paidleave, illness, and so on) are handled in payroll.

You can define specifications to determine:• Which valuation basis is used to valuate a paid absence

• Which absences are granted bonuses (for example, vacation allowance)

• Which absences cause deductions in pay

• Which absences are used to form statistics




61

Absence Valuation Types

There are four different methods of valuating absences. You can use one method, or acombination of several methods. The following provides an introduction to the four methods.

1. Form c oun t ing classes for factor ing: Absences which are not paid, or only partially paid, lead to a reduction in salary. Countingclasses are used in order to form "buckets" to valuate paid and unpaid absences.Example: Employees who have taken unpaid leave should be subject to a reduction in salary.

2. Valuate absences u sing the 'as if ' princ iple: The absence is valuated as if the employee had worked.

Example: If employees are absent due to incapacity to work and are being paid, they shouldreceive the same bonuses for working on Sundays and public holidays as they would if theywere actually at work.

3. Valuate absences us ing averages or co nstan ts: The number of absence hours, absence days, calendar days, payroll days or payroll hours isentered in the number field of the wage type.Example: The average amount of overtime worked by the employee merits a supplementaryvacation allowance.

4. User-specif ic c alculat ion : If the standard methods of absence valuation are not adequate for your purposes, you cancreate your own personnel calculation rules for special processing.




62

ABSENCE VALUATIONStep 1: Describe Absence Valuation Rules

In this activity, you describe absences according to your company requirements regardingabsence valuation in Payroll. You describe absences by defining rules for absence valuation.

Examples: You create descriptions of absences based on the following requirements:

1. You want to valuate absences for paid leave differently to absences for illness or days in lieu.

2. You want to keep statistics on the number of paid and unpaid absences that occur in your company. To do this, you create counting class in in the step Form counting classes for absencevaluation. When the payroll is run, you collect the times in these "buckets" and can then fill the

appropriate wage types during further processing.




63

ABSENCE VALUATION

Step 2: Assign absences to valuation classes

Absences that must be processed in the same way through the assignment of absence

valuation rules are grouped in this step. According to the absence valuation rules, you definehow specific employee absences must be valuated in payroll in the subsequent operationphases.

Examples: You want to valuate absences for paid leave differently to absences for sickness or days in lieu.. So, decide which absence types you want to group together & enter the requiredabsence valuation rule.




UNIT 6: TIME WAGE TYPES SELECTION




66

TIME WAGE TYPES SELECTION

Time wage type is a Primary wage type that the system makes available by means of time data

information. Example: Requirement is to generate a Overtime bonus 50% time wage type. Youcan use the customizing system to define conditions that must be met before the Overtime

bonus 50% time wage type can be assigned to an employee.

Such conditions could be as follows:

•The employee must have worked at least 2 hours of overtime.

•The employee must have worked on a weekend.

•The employee must have worked on a public holiday.

Whenever the conditions you defined are met, the system automatically selects the time wagetype Overtime bonus 50% for the employee in question.




67

Time wage type selection

In time wage type selection, we use employees‟ time data to determine the hourly wage and

bonuses for overtime, work on a public holiday, and night work.

Time wage type selection is a processing step and is called by function GWT (Generate WageTypes) in the schema (TC00 Wage Type Generation International or TC04 Wage Type

Generation International for Time Evaluation Without Clock Times for Payroll, or in the standardtime evaluation schemas.

Function GWT processes the entries of table T510S (Time Wage Type Selection), whichcontains the wage types that can be selected and the conditions that must be met for the

selection of a wage type.It is very important to have table T510S configured accurately (i.e. conditions set per therequirement) in order to be able to select the time wage types. This is done in Customizing for Time Management by the time management team.




68





69

Time wage type selection rule

There are many different regulations governing the selection of time wage types. They areformed when several individual rules in T510S are grouped into a rule group. Each individualrule contains the time wage type to be selected. If even one of the conditions specified in anindividual rule is not fulfilled, the time wage type is not selected.




70


Groupings for time wage type selection

The rule groups for the selection of time wage types are determined according to the time wage

type selection rule group (first column) and the day grouping for time wage type selection(Second column), which are the key to reading table T510S.

Conditions on the time or duration of work performed or on the day being evaluated

For each time wage type/individual rule, you determine conditions on the day being evaluatedfor the time or duration of work performed. A time wage type is only selected if all the specifiedcriteria are met.




71

Processing Types

A AbsenceC On-call shiftG Guaranteed hoursH Assumed overtimeJ Break for "as if" timeK Break

M OvertimeN Overtime (paid +

comp)O Overtime (comp only)P AttendanceR On-call duty

S Planned workX Public holiday




UNIT 7: AVERAGES

AVERAGES




73

AVERAGES

Collective bargaining agreements envisage various situations whereby employees receiveremuneration based on averages from previous periods - for example, in the case of absence or because of lost production time.

There are usually three types of valuation basis for time wage types:

• Valuation bases entered in a table as a constant.

• Valuation bases calculated according to basic pay.

• Valuation bases calculated as an average of several previous periods.

C fi ti




74

Configuration

Configuration/Customizing for Averages can be done under Payroll - Time Wage type valuation -New Averages

C fi ti St




75

Configuration Steps

STEP 1: Create bases for calculating average values

In this step, you define which primary wage types and which partial period parameters are to be

included in which average basis. The average value calculation bases that you create here arecumulated in an internal table and are entered through final processing in the calculation of theaverage value. When you execute this step, the screen gives you an option to go either by wagetype or by partial period parameters.




UNIT 8: FACTORING

Factoring Concept




78

Factoring Concept

Factoring refers to a partial pay period amount determination. It describes the pro ratacalculation of remuneration for an exact period. For example, it is required to reduceremuneration for unpaid absences, to account for change in organizational assignment and incost accounting.

In payroll, partial period parameters are created based on the employee‟s work schedule,

absences and public holidays. These parameters are used in personnel calculation rules tocalculate partial period factors.

Factoring only covers the events that occur in the current period. Once the factor is calculatedand it is then multiplied by the wage type assigned to calculate the prorated employeeremuneration.

Infotype changes relevant to Factoring during a payroll run:

Personnel Actions (0000)

Organizational Assignment (0001)

Planned Working Time (0007)

Basic Pay (0008)

Recurring Payments/Deductions (0014)

Additional Payments (0015)

Absences (2001)

Partial period factors




79

Partial period factors

In payroll, a factor is required to calculate partial period amounts. The partial period factor is avalue between 0 and 1. As soon as changes are made to master data that trigger factoring, thefactor is multiplied by the employee's primary wage types for exact periods if the primary wagetypes must be reduced, or if their constituents for exact periods must be calculated separately.The calculation of partial period factors is always based on times that result, for example, fromthe employee's personal work schedule or absences.

Example: An employee is hired in the middle of the payroll period.

Factoring Methods




80

Factoring Methods

Formula for Deduction Method

•The deduction method multiplies the employee's hourly/daily rate by the number of unpaid

times, and deducts the result from the employee's pay. The number of working hours specifiedper period is used as the divisor.

•If payroll is run for monthly periods, the general divisor determines that each calculation unit(hour or day) has the same value irrespective of whether the period is a short or long month.

Factor = 1 -Absence----------------------------------------

General period working time

General period working time - absence-------------------------------------------------------


=

Problem: Many absences during monthly payroll

Long month

-0.097 ---------------

167.7 - 184

167.7 Claims on employee

Short month

0.14 ---------------167.7 - 144

167.7Pay despite absence for whole period

Factoring Methods




81

Factoring Methods

Formula for Payment Method

•In the payment method, the employee is remunerated for the period actually worked or for paid

absences. The hourly or daily rate for the payroll period is calculated based on the amount of remuneration agreed and multiplied by the number of hours or days to be paid. The number of working hours specified per period is used as the divisor.

•If payroll is run for monthly periods, the general divisor determines that each calculation unit(hour or day) has the same value irrespective of whether the period is a short or long month.

Factor =1-------------------------------------------------------------


Planned working time - Absence----------------------------------------------


=

Problem: Few absences during monthly payroll

Long month

-1.049 ----------184 - 8

167.7Pay too high despite absence

Short month

0.906 ----------160 - 8

167.7Large reduction for few absences

* (Planned working time - Absence)

Factoring Methods




82

Factoring Methods

Formula for PWS Method

•In the PWS method, the individual, actual planned working time according to the employee's

personal work schedule (PWS) is used as the divisor. The PWS method is particularly suitablefor reductions if planned working time is specified exactly and all deviations from plannedworking time are entered in the system.

Factor =1---------------------------------------------------------------------

Period working time according to PWS

PWS planned working time - Absence------------------------------------------------------

Period working time according to PWS

=

Problem: Reduction factors of varying size

Long month

0.957 ----------184 - 8

184 The hourly rate is lower in longmonths than in short monthsShort month

0.950 ----------160 - 8

160

* (PWS planned working time - Absence)



Personnel Calculation Rules for Factoring



84PAYROLL TRAINING© Copyright Capgemini 2008 All Rights Reserved 84


•Personnel calculation rule XPPF is accessed in subschema XAL0 according to wage types /801to /816 to calculate partial period factors. XPPF accesses personnel calculation rules XPP0 andXPP1 for wage types /801 and /802. XPPF calculates the following factors for Cost Accounting:

•Difference between the working time for the current period and the average working time andsave it in secondary wage type /810.

•Share of paid public holidays on which there is no work and save it in secondary wage type/814.

•Share of work on public holidays and paid absences and save it in secondary wage type /815.

•Share of unpaid absences and save it in secondary wage type /816.






XPP1

Calculate partial period factors

no

XPPF XPP0 + XPP1 Determine partial period factors

XPP0

- Unpaid absence?

- Change in basic pay?

- Employee joined in payroll period?

- Employee left in payroll period?

XPPF

Inactive work relationship the entire period?

no

yesEXIT

Assigning Partial Period Factors




Assigning Partial Period Factors

In this step, you specify the factor by which a wage type is to be reduced, if this is required. Thisapplies to wage types that are recorded using the Basic Pay (0008) or RecurringPayments/Deductions (0014) infotypes Select the required specification for processing class 10(Mark wage types for monthly factoring).

IMG menu path:

Payroll International > Reduction Formulas > Assign Reduction Factors




UNIT 9: CUMULATION WAGE TYPE

Cumulating and storing time wage type





Processing class 3 is used for cumulation of time wage type. In this step, you determine howeach Time wage type is stored in the results table and how you create cumulation wage types.

The standard SAP R/3 System contains the following possibilities:•The wage type is not stored in the results table but is transferred

•The wage type is stored in the results table without being cumulated

•The wage type is cumulated and stored in the results table

The wage type is cumulated and stored in the results table, the hours for this wage type are alsocumulated as overtime hours.

IMG menu path:

Payroll > Cumulation Wage Type> Maintain cumulation wage types on basis of temporal

payments






In this screen you can setup specification for the cumulation of time wage type asper requirement. You can also define the validity period for the cumulation. Youcan also indicate whether it is total gross or net payments/deduction.

Cumulating and storing basic pay wage types





Processing class 20 is used for the cumulation of basic pay wage type. In this step, youdetermine how each wage type, that you enter using infotypes Basic pay, Recurring Paymentsand Deductions and Additional Payments - is stored in the results table, and which cumulation

wage types are generated.

The standard SAP R/3 System contains the following possibilities:

•The wage type is not stored in the results table but is transferred unchanged

•The wage type is excluded

•The wage type is stored in the results table and is included in the cumulation wage types

•The wage type is stored in the results table without being cumulated

IMG menu path:

Payroll > Cumulation Wage Type> Maintain cumulation wage types on basis of master data






In this screen you can setup specification for the cumulation of basic pay wage type as per requirement. You can also define the validity period for the cumulation. You can also indicatewhether it is total gross or net payments/deduction.

Create Annual values





Processing class 30 is used for the cumulation of annual wage type. In this step you can setupwage type for year-to-date cumulation. For each wage type to be cumulated you will define thefollowing:

For each wage type to be cumulated you will define the following:

the time period to be cumulated

whether number/balance is to be cumulated.

IMG menu path:

Payroll > Cumulation > Assign cumulations to wage types> Wage types for cumulation






In this screen you can setup specification for the cumulation of YTD wage type as per requirement. You can also define the validity period for the cumulation.




UNIT 10: RETROACTIVE ACCOUNTING



Retroactive Accounting Relevance




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Retroactive accounting relevance is determined per infotype or per infotype field. Determinationof which infotypes or fields are relevant to retroactive accounting, customizing for Personnel

Administration under Customize Procedures ® Infotypes ® Define Fields Relevant for Retroactive Accounting.

Retroactive Accounting Trigger and Process




g gg

Retroactive accounting is triggered in the following steps:

1)If an infotype that is relevant to retroactive accounting is edited, the system enters the

following date specification of the changed infotype record in the Payroll Status infotype (0003): Earliest master data change since last payroll run

Earliest payroll-relevant master data change (bonus).

2) At the next regular payroll run or correction accounting (Off-Cycle Payroll Type B), the systemchecks whether the date specifications set in the first step are before the date up until which thesystem has already run payroll according to the Payroll Status infotype (0003).

3)If this is the case, the system performs retroactive accounting. It begins with the payroll periodin which the date of the earliest master data change or the earliest payroll-relevant master datachange (bonus) is. The system calculates all payroll periods again, which are between this dateand the date up until which the system has run payroll for the employee.

4)The system deletes the date specifications for the earliest master data change and the earliestpayroll-relevant master data change (bonus) from the Payroll Status infotype (0003).



Retroactive Accounting Limit




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A retroactive accounting limit is determined by the system for all employees assigned to aparticular payroll area and then it determines a more recent retroactive accounting date for individual employees.

The date furthest in the past up until which master and time data may be changed in the payrollpast and up until which the system can perform retroactive accounting.

The employee‟s absolute retroactive accounting limit is his or her hiring date.

The retroactive accounting limit for an employee set in the payroll status infotype 0003.This is employee specific retroactive accounting period.

The retroactive accounting limit of a payroll area set in the payroll control record. This isspecific to the payroll area

The system uses these values to select the most recent date and applies it to the payrollof the employee.

Retroactive Accounting Limit




Name of employee Hiring date of employee Earliest possible retroactive

accounting period in control

record of payroll area

Earliest personal retroactive

accounting period of employee

(infotype Payroll Status )

Donna Moore Jan. 01, 1996 Jan. 2000 July 01, 2000

David Grecco Aug. 01, 2000 Jan. 2000 No entry

Pierre Dubois Jan. 01, 1996 Jan. 2000 July 01, 1998

The system always uses the most recent of the three dates that are relevant to the process of

determining an employee‟s retroactive accounting limit. Up to this date, an employee‟s master data that is relevant to payroll can be changed with retroactive effect. The employee‟s absolute

retroactive accounting limit is his or her hiring date.

Therefore, the employees listed above have the following retroactive accounting limits:

Donna Moore: July 01, 2000

David Grecco: August 01, 2000Pierre Dubois: January 01, 2000

How are payroll results updated due to Retroactive Accounting




If a payroll result is no longer up-to-date because retroactive accounting was performed, it is notdeleted. Instead, it is assigned a different status indicator by the system.

The system assigns a status indicator to each payroll result.

There are three different status indicators:

A for the current result

P for the previous result

O for all other results

Recalculation Differences




If employee‟s wage and salary elements are changed with retroactive effect, the system

calculates difference amounts and forwards them to the current payroll period as recalculationdifferences.

If wage and salary elements are changed with retroactive effect, the amount of wage type /560(Payment amount ) is not changed. Recalculation differences are calculated and forwarded asfollows:

The system calculates a new payment amount for the previous payroll period, but does not savethis value in the payroll result.

The system calculates the difference between the new payment amount and the originalpayment amount for the retroactive accounting result.

– If the new payment amount is greater than the original payment amount, the employee receives anarrears payment. In this case, the system saves the insufficient amount transferred to the employee witha negative sign in wage type /551 (Recalculation difference).

– If the new payment amount is less than the original payment amount, the employee must effect arepayment. The difference is withheld in the current payroll period. In this case, the system saves the

excessive amount transferred to the employee with a positive sign in wage type /551 (Recalculationdifference).

Recalculation Differences



The system transfers the amount of wage type /551 (Recalculation difference) from theretroactive accounting result with a reversed sign to the payroll result of the current payrollperiod, and saves it in wage type /552 (Subs.clearing/prev.month):

– If the employee receives an arrears payment, the sign changes from minus (-) to plus (+).

– If the employee must effect a repayment, the sign changes from plus (+) to minus (-).

Therefore, wage types /551 (Recalculation difference) and /552 (Subs.clearing/prev.month)always have opposite positive (+) / negative (-) signs:

Change Sign for wage type /551(Recalcul ation dif ference) in

retroactive accounting result

Sign for wage type /552Subs.clearing/prev.month in

payroll result of current payroll

period

An employee’s remuneration

element is increased with

retroactive effect

negative positive

An employee’s remuneration

element is reduced withretroactive effect

positive negative

Payroll BS 7 0 Presentation vFINAL

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