SAP HR - India Payroll

See discussions, stats, and author profiles for this publication at: https://www.researchgate.
net/publication/316879008
Effectiveness of SAP HR in Payroll
Thesis · April 2013

DOI: 10.13140/RG.2.2.14999.37284
CITATIONS READS
0 2,029
1 author:
Niladri Bihari Nayak

Deloitte
2 PUBLICATIONS 0 CITATIONS
SEE PROFILE
Some of the authors of this publication are also working on these related projects:
People Analytics View project
Tech-Fiction Series : Internet of Things (IoT) View project
All content following this page was uploaded by Niladri Bihari Nayak on 12 May 2017.
The user has requested enhancement of the downloaded file.

Submitted by
“Niladri Bihari Nayak”

SMU Roll No. 521151221
Under the guidance of

Prof. T.K. Vijaykumar
A PROJECT REPORT submitted in partial fulfillment of the requirement

for the award of the degree of MBA IN Human Resources Management
Aug-2013
of SIKKIM MANIPAL UNIVERSITY, INDIA

ISBR College
#107, Phase 1, Electronic City, Behind BSNL Telephone Exchange,Bangalore-560100
Ph: 080 40819500, Email: admin@isbr.in
Acknowledgement
ISBR College, Bangalore proved to be mine of knowledge and experience for me.
It was definitely a honor to be in this Institute. This institute provided an ample
opportunity to transform my knowledge into something more productive and
concrete. To study in this institute certainly adds a feather in my cap.
I would like to extend my appreciation to Mr. Manish Kothari, Director, BET

College, for giving me an opportunity to do my MBA from Sikkim Manipal
University.
I am grateful to Prof. T.K. Vijaykumar, ISBR(Formerly BET College) for giving

me an opportunity to undertake the project and support to complete my project
work.
I am extremely grateful to my Family, Friends, Colleagues and BET College staff

for their full support.
Name : Niladri Bihari Nayak

Reg.No: 521151221
Bonafide Certificate
Certified that this project report titled “Effectiveness of SAP HR in Payroll” is
the bonafide work of “Niladri Bihari Nayak” (SMU Roll No.521151221) who
carried out the project work under my supervision.
SIGNATURE
HEAD OF THE DEPARTMENT
University Study Center Certificate
This is to certify that the Project entitled
“Effectiveness of SAP HR in Payroll”
Submitted in partial fulfillment of the requirements for the degree of

Master of Business Administration of Sikkim – Manipal University of
Health, Medical & Technological sciences
Has worked under my supervision and guidance and that no part of this report has
been submitted for the awarded of any other degree, Diploma, Fellowship or
other similar titles or prizes and that the work has not been published in any
journal or Magazine.
Reg.No : 521151221
Attested
Director/ principal/of
Study Centre
Examiner’s Certification
The project report of
Titled
Is approved and is acceptable in quality and form
Internal Examiner External examiner

Student’s Declaration
I hereby declare that the project report titled
Submitted in partial fulfillment of the requirements for the degree of Master

of Business Administration to Sikkim-Manipal University, India
Is my original work and not submitted for the awarded of any other
degree, Diploma, Fellowship or other similar titles or prizes and that
the work has not been published in any journal or Magazine.
Place : Bangalore Signature of the Student

Date : 12th April 2013. Reg. No : 521151221
Contents
Human Capital Management: Configuration Guide ............................................................................ 10
1.1 Purpose....................................................................................................... 10
1.2 Configuration .............................................................................................. 10
1.2.1 Maintain General Settings (HCM-Customizing Settings) ............................... 10
1.2.1.1 HCM Enterprise Structure ........................................................................... 10
1.2.1.1.1 Personnel Area ............................................................................................ 10
1.2.1.1.2 Personnel Sub Area ..................................................................................... 11
1.2.1.1.3 Employee Group.......................................................................................... 12
1.2.1.1.4 Employee Subgroup..................................................................................... 13
1.2.1.1.5 Assignment of Personnel Area to Company Code .......................................... 15
1.2.1.1.6 Assign employee subgroup to employee group .............................................. 16
1.2.1.2 Organizational Management ........................................................................ 17
1.2.1.2.1 Maintain Number Range.............................................................................. 17
1.2.1.3 Personnel Administration ............................................................................ 19
1.2.1.3.1 Maintain Number Range Intervals for Personnel Numbers ........................... 19
1.2.1.3.2 Determine Defaults for Number Ranges (Feature NUMKR) .......................... 20
1.2.1.3.3 Family Data................................................................................................. 21
1.2.1.3.4 Organizational Data..................................................................................... 22
1.2.1.3.4.1 Create Payroll Area ..................................................................................... 23
1.2.1.3.5 Evaluation Basis .......................................................................................... 24
1.2.1.3.5.1 Date Specifications (IT 0041) ..................................................................... 24
1.2.1.3.6 Customizing Procedure ................................................................................ 26
1.2.1.3.6.1 Info types ..................................................................................................... 26
1.2.1.3.6.1.1 Actions ................................................................................................ 28
1.2.1.3.6.1.1.1 User Group Dependency on Menus and Info Groups .............. 28
1.2.1.3.6.1.2 Define Infogroups .............................................................................. 32
1.2.1.3.6.1.3 Set up Personnel Actions ................................................................... 49
1.2.1.3.6.1.4 Create Reasons for Personnel Actions .............................................. 50
1.2.1.3.6.1.5 User Group Dependency on Menus and Info Groups ...................... 51
1.2.1.3.6.1.6 Action Menu ....................................................................................... 52
1.2.1.3.7 Customizing User Interfaces ........................................................................ 53
Payroll .............................................................................................................................................. 54
Configuration Guide.......................................................................................................................... 54
1 Purpose..................................................................................................................................... 54
2 Preparation ............................................................................................................................... 54
2.1 Prerequisites ............................................................................................... 54
3 Configuration ............................................................................................................................ 54
3.1 Basic Settings .............................................................................................. 54
3.1.1 Payroll Organization .................................................................................... 54
3.1.1.1 Define Period Parameters ............................................................................ 54
3.1.1.2 Define Date Modifiers .................................................................................. 55
3.1.1.3 Check Payroll Accounting Area..................................................................... 55
3.1.1.4 Generate Payroll Periods.............................................................................. 57
3.1.1.5 Generate Calendar for Cumulations.............................................................. 59
3.2 Payroll Data ................................................................................................ 60
3.2.1 Basic Pay ..................................................................................................... 61
3.2.1.1 Define EE Subgroup Grouping for PCR and Collective Agreement Provision .. 61
3.2.1.2 Check Pay Scale Type................................................................................... 63
3.2.1.3 Check Pay Scale Area ................................................................................... 64
3.2.1.4 Check Assignment of Pay Scale Structure to Enterprise Structure .................. 65
3.2.1.5 Set up payroll period for collective agreement provision ................................ 66
3.2.1.6 Wage Types ................................................................................................. 67
3.2.1.6.1 Create wage type catalog .............................................................................. 67
3.2.1.6.2 Check wage type group 'Basic Pay' ................................................................ 68
3.2.1.6.3 Employee Subgroups for Primary Wage Type ............................................... 69
3.2.1.6.4 Personnel Sub areas for Primary Wage Type ................................................. 71
3.2.1.6.5 Check Wage Type Catalog ............................................................................ 72
3.2.1.6.5.1 Check wage type text .................................................................................. 72
3.2.1.6.5.2 Check entry permissibility per info-type................................................... 73
3.2.1.6.5.3 Define Wage Type Permissibility for each PS and ESG............................ 74
3.2.1.6.5.4 Check wage type characteristics ................................................................ 76
3.2.2 Additional Payments ................................................................................... 79
3.2.2.1 Wage Types ................................................................................................. 79
3.2.2.1.1 Create wage type catalog .............................................................................. 79
3.2.2.1.2 Check wage type group 'Additional Payments'............................................... 81
3.2.2.1.3 Define employee subgroup grouping for primary wage type........................... 82
3.2.2.1.4 Personnel Sub areas for Primary Wage Type ................................................. 84
3.2.2.1.5.1 Check wage type text .................................................................................. 85
3.2.2.1.5.2 Check Entry Permissibility for Additional Payments ............................... 86
3.2.2.1.5.3 Define Wage Type Permissibility for each PS and ESG............................ 87
3.2.2.1.5.4 Check wage type characteristics ................................................................ 89
3.2.3 Recurring Payments and Deductions ............................................................ 91
3.2.3.1 Wage Types ................................................................................................. 91
3.2.3.1.1.1 Check entry permissibility per info-type.................................................... 92
3.2.4 Absences ..................................................................................................... 93
3.2.4.1 Describe Absence Valuation Rules................................................................ 93
3.2.4.2 Group Absences for Absence Valuation......................................................... 94
3.2.4.3 Valuation of Absences .................................................................................. 95
3.2.4.3.1 Create Counting Classes for Absence Valuation............................................. 95
3.2.5 Pay Scale Groupings .................................................................................... 97
3.2.5.1 Define Pay Scale Groupings for Allowances .................................................. 98
3.2.5.2 Assign Pay Scale Groupings for Allowances .................................................. 99
3.2.6 Basic Salary for India ................................................................................. 100
3.2.6.1 Assign Basic Wage Types to Grouping for Allowances ................................. 101
3.2.7 Reimbursements, Allowances and Perks ..................................................... 102
3.2.7.1 Assign Wage Type Model for Pay Scale Grouping for Allowances ................. 103
3.2.7.2 Maintain Default Wage Types for Basic Pay ................................................ 104
3.2.8 Retirement Benefits ................................................................................... 105
3.2.8.1 Gratuity .................................................................................................... 105
3.2.8.1.1 Maintain Gratuity Trust ID ........................................................................ 105
3.2.8.1.2 Maintain Gratuity Contrib. Freq. and Related Wage Types .......................... 106
3.2.8.1.3 Define Contribution Rates for Gratuity ....................................................... 107
3.2.8.1.4 Maintain the Eligibility Years for Gratuity .................................................. 107
3.2.8.1.5 Check for Gratuity Contribution ................................................................. 108
3.2.8.2 Superannuation......................................................................................... 108
3.2.8.2.1 Maintain Superannuation Trust ID ............................................................ 109
3.2.8.2.2 Maintain Superannuation Contrib. Freq and Rel. Wage Types ..................... 109
3.2.8.2.3 Define Contribution Rates for Superannuation ........................................... 110
3.2.8.2.4 Maintain Eligibility Details for Superannuation .......................................... 111
3.2.9 Statutory Social Contribution ..................................................................... 112
3.2.9.1 Provident Fund ......................................................................................... 112
3.2.9.1.1 Define Trust Details for Provident Fund ..................................................... 113
3.2.9.1.2 Assign Company Rates for Provident Fund ................................................. 114
3.2.9.1.3 Define PF Trust Validity Period .................................................................. 114
3.2.9.1.4 Maintain Contribution Details for Provident Fund ...................................... 115
3.2.9.1.5 Define Contribution type for Statutory rates for Provident Fund.................. 116
3.2.9.2 Employees' State Insurance ....................................................................... 117
3.2.9.2.1 Maintain ESI Eligibility Limit .................................................................... 118
3.2.9.2.2 Maintain Number of Working Days in a Month........................................... 119
3.2.9.2.3 Define Personnel Area and Subarea Groupings for ESI................................ 120
3.2.9.2.4 Assign ESI Groupings for Personnel Area and Subarea................................ 120
3.2.9.2.5 Maintain Contribution Rates for ESI .......................................................... 121
3.2.10 Other Statutory and Non-Statutory Deductions .......................................... 122
3.2.10.1 Assign Universal Contribution Groupings for Universal Contribution Types 122
3.2.10.1.1 Assign State for Universal Contribution Grouping....................................... 123
3.2.10.1.2 Assign Slab Code and Other Parameters for Each State of a Univ. Type........ 124
3.2.10.1.3 Assign Contribution Value for Each Slab .................................................... 125
3.2.11 Professional Tax ........................................................................................ 126
3.2.11.1 Define Professional Tax Grouping Details ................................................... 126
3.2.11.2 Assign P Tax Groupings for Personnel Areas and Subareas.......................... 127
3.2.11.3 Assign Amounts for Professional Tax Deduction ......................................... 128
3.2.11.4 Maintain Method and Form Layout for P Tax Groupings ............................. 129
3.2.12 Tax ........................................................................................................... 130
3.2.12.1 Basic Settings ............................................................................................ 131
3.2.12.1.1 Define Personnel Area and Subarea Groupings for Tax ............................... 131
3.2.12.1.2 Assign Tax Groupings for Personnel Areas and Subareas............................. 132
3.2.12.1.3 Maintain Feature to Return Employer IncomeTax Related Data .................. 133
3.2.12.2 Tax Liability on Reimbursements, Allowances and Perks ............................ 134
3.2.12.2.1 Define Tax Codes ....................................................................................... 134
3.2.12.2.2 Assign Tax Code Limits to Wage Types ....................................................... 135
3.2.13 Tax Exemptions......................................................................................... 136
3.2.13.1 Define Other Allowance or Reimbursement Subtype for Exemption ............ 136
3.2.14 Recovery of Rounded Off Amounts............................................................. 137
3.2.14.1 Maintain Details for Recovery of Rounded Off Amounts.............................. 137
3.2.15 Off-Cycle Activities .................................................................................... 138
3.2.15.1 Check entry permissibility for Infotype (0267) ............................................ 138
3.2.15.2 Set Up Off-Cycle Reasons........................................................................... 139
3.2.16 Company Loans......................................................................................... 140
3.2.16.1 Master Data .............................................................................................. 140
3.2.16.1.1 Maintain Loan Types ................................................................................ 140
3.2.16.1.2 Maintain Loans Grouping .......................................................................... 142
3.2.16.1.3 Maintain Salary Components ..................................................................... 144
3.2.16.1.4 Maintain Loans Eligibility Checks and Limits ............................................. 145
3.2.16.2 Calculation ................................................................................................ 146
3.2.16.2.1 Adjust Value Date ...................................................................................... 146
3.3 Posting of Payroll Results........................................................................... 147
3.3.1 Activities in the HR System ........................................................................ 147
3.3.1.1 Employee Grouping and Symbolic Accounts ............................................... 148
3.3.1.1.1 Define Symbolic Accounts.......................................................................... 148
Human Capital Management: Configuration Guide
1.1 Purpose
This configuration guide provides the information that you need to manually set up
configuration for Implementing HCM module which fulfills GIL requirements to
map their HCM systems and processes.
1.2 Configuration
1.2.1 Maintain General Settings (HCM-Customizing Settings)
1.2.1.1 HCM Enterprise Structure
1.2.1.1.1 Personnel Area

USE
The personnel area is an organizational unit that represents a specific area of the enterprise and is
organized according to aspects of personnel, time management and payroll. A personnel area is divided
into several personnel subareas. Please note that the personnel subareas contain the business
characteristics. To assign the business characteristics, you must have set up at least one personnel
subarea for each of your personnel areas even if you do not use personnel subareas in your enterprise
structure.
PROCEDURE
1. Access the activity using one of the following navigation
options:
Transaction SPRO
Code
IMG Menu Enterprise Structure  Definition Human
Resources Management Personnel Areas
1.2.1.1.2 Personnel Sub Area
USE
A personnel subarea is an organizational unit that represents a specific area of the

company organized according to certain aspects of personnel, time management and
payroll. The following business subtasks belong to the personnel subarea:
 Defining of pay scale and wage type structure
 Defining planned working hours
PROCEDURE
options:
Transaction SPRO
Code
Resources Management Personnel Sub Areas
Create personnel subareas
1.2.1.1.3 Employee Group
USE
The employee group allows you to divide your employees into groups and allows you to
define their relationship to the enterprise. The following essential organizational
functions can be carried out using the employee group:
 generating default values when entering data; for example, for the payroll
accounting area or for the basic pay of the employee
 generating a selection criterion for evaluations
 generating a unit for the authorization check
PROCEDURE
options:
Transaction SPRO
Code
Resources Management Employee Group
1.2.1.1.4 Employee Subgroup

USE
The employee subgroup represents a subdivision of the employee group. When you
define employee subgroups, you are essentially begun to set up your personnel
structure. Features are allocated to this in later steps. These steps are dealt with at the
spot where they are established in a business sense.
The following business subtasks are provided among other things:
 specification of processing in payroll accounting
 specification of validity of primary wage types
 specification of validity of work schedules
 specification of validity of pay scale groups
 specification of validity of time quota types
PROCEDURE

options:
Transaction SPRO
Code
Resources Management Employee Sub
GroupDefine employee subgroup
1.2.1.1.5 Assignment of Personnel Area to Company Code
USE
In this step, you allocate each of your personnel areas to one company code. When you create a
personnel number, the corresponding company code is allocated to it in the info type Organizational
allocation (0001), depending on the enterprise structure in which the employee is situated.
PROCEDURE
options:
Transaction SPRO
Code
IMG Menu Enterprise Structure  Assignment Human
Resources Management Assignment of Personnel
Area to Company Code
1.2.1.1.6 Assign employee subgroup to employee group
USE
In this step, you assign your employee subgroups to their respective employee groups. In addition to
this, you determine whether the employee group/employee subgroup combinations are allowed for the
country groupings.
PROCEDURE
6. Access the activity using the following navigation option:
Transaction SPRO
Code
IMG Menu Enterprise Structure  Assignment Human
Resources Management Assign employee
subgroup to employee group
1.2.1.2 Organizational Management
Use
In this step, you make the necessary system settings for the implementation of the "Organizational
Management" component.
"Organizational Management" forms the base for the Personnel Planning and Development area (as well
as Organizational Management, this includes the Personnel Development, Personnel Cost Planning and
Training and Event Management components) and allows you to analyze and adjust your organizational
plan as well as maintain structure data.
1.2.1.2.1 Maintain Number Range
Use
In this step, you specify the number ranges for your objects and the type of number
assignment. You must assign a unique number to every object.
You have the following options:
 Internal number assignment
If you want the SAP System to assign the numbers, enter "IN" in the ‘NR’ field. The
number ranges are then indicated by the letters “IN".
 External number assignment
If you want the user to assign the numbers, enter "EX" in the 'NR' field. The number
ranges are then indicated by the letters "EX".
Procedure
options:
Transaction SPRO/OONR
Code
IMG Menu Personnel Management  Organizational
Management Basic Settings  Maintain Number
Ranges Maintain Number Ranges
CHECK
1.2.1.3 Personnel Administration
Use
This section contains all the information you need to implement the Personnel Management
component.
1.2.1.3.1 Maintain Number Range Intervals for Personnel Numbers
Procedure
options:
Transaction PA04
Code
IMG Menu Personnel Management  Personnel
Administration  Basic Settings  Maintain
number range intervals for personnel number
Ranges created for Human resources:

1.2.1.3.2 Determine Defaults for Number Ranges (Feature NUMKR)
Use
In this step it is determined whether internal or external number assignment is used
when hiring new employees. In this building block the external number assignment is
used.
Procedure
options:
Transaction PE03, Maintain Feature NUMKR
Code
Administration  Basic Settings  Determine
defaults for number ranges
2. NUMKR Info type 0000 (Actions) = 02 Status: Active
1.2.1.3.3 Family Data
Use
In the section "Family", you configure the following areas:
 family characteristic
 employers' addresses
PROCEDURE
Transaction Code SPRO
Menu Personnel AdministrationPersonal
DataFamilyPersonal DataDefine Family
Type
1.2.1.3.4 Organizational Data
Use
In this section, you determine which data can be entered in infotype Organizational Assignment (0001).
You should always use this infotype because information (e.g. employee group and employee subgroup),
which is of the utmost importance for authorization procedures or the control of payroll, is stored in it.
1.2.1.3.4.1 Create Payroll Area
Use
In this step, you set up the payroll areas (accounting areas) that your enterprise needs. The
payroll area fulfills two functions that are necessary for payroll:
 It groups together personnel numbers that are to be processed on the same

date.
 It determines the exact payroll period
Procedure
Menu Personnel Management  Personnel
Administration  Organizational
AssignmentCreate Payroll Area/ Check Default
Payroll Area/
FEATURE ABKRS
USE:-
This feature enables you to obtain the default value for the payroll area. The return
value of the feature is a payroll area from table T549A, Payroll Areas. This can be
overwritten and is reassigned and displayed in a warning message when changes are
made to the organizational assignment x
1.2.1.3.5 Evaluation Basis

1.2.1.3.5.1 Date Specifications (IT 0041)
Use
In the section "date specifications", you can determine date types and you can define in a feature, which
of these date types is to be proposed as a default when the infotype Date specifications (0041) is
maintained.
Procedure

Administration  Evaluation Basis Date
SpecificationsDefine date type/Determine default
date specification
FEATURE - DATAR
USE:
This feature can be used to determine defaults for date types In Info type 0041(Date
Specification)
The return value of the feature is a date type from table T548Y.
1.2.1.3.6 Customizing Procedure
1.2.1.3.6.1 Info types
Use
In this section, you can change the info type attributes.
For example, you would like to set up your system so that the start date of the current Organizational
Assignment (0001) info type record is defaulted as the start date when you create a record for info type
nnnn.
Please use the field documentation for the meaning of the individual info type attributes.
Procedure

Administration  Customizing ProceduresInfo
typesDefine fields relevant for retroactive
accounting/Assign info types to countries
Define fields relevant for retroactive accounting

Select one of the info types and go to Details button
If user puts Tick then Retro trigger will happen for this Info type, If Blank then retro
will not trigger.
Assign info types to countries
1.2.1.3.6.1.1 Actions
Use
In this chapter, you can define personnel actions together with the possible reasons and the work
contents and the choice of actions for the administrator.
Procedure

Administration  Customizing
ProceduresActionsDefine info groups
1.2.1.3.6.1.1.1 User Group Dependency on Menus and Info Groups
Use
The purpose of this activity is to assign the menu and info group for all personnel
actions
Procedure
options:
ProceduresActionsDefine info groups Info
group
options:

ProceduresActionsDefine info groups User
Group Dependency on Menus and Info Groups
Feature IGMOD
USE
In this step, you define the info groups that are processed when
actions are carried out. This must be carried out before you
proceed to the next step where you must define the work list,
i.e. the info group, for every personnel action that is to be
carried out.
1.2.1.3.6.1.2 Define Infogroups
Use
In this step, the info group is defined that are processed when the action Hiring Service
Provider is carried out. The info groups can be defined so that they are dependent on
the user group (user parameter "UGR"). In this case the value of the user group is 40
Procedure
Access the activity using one of the following navigation
options:
Transaction SPRO
Code
Administration  Customizing Procedures 
Actions  Define info groups Info group
There are some operations which are used in the info group as and when
necessary.
INS – When in any Action an info type is creating for the first time.
COP- When in any action an info type refers the previous data
MOD – When in any Action an info type refers to old data which needs to
change.
LIS9- This operation only requires in termination action when old data is
to be de to a certain date.
Hire Action Type “GA”

Confirmation of Probation Action Type “GB”
Extension of Probation Action Type “GC”
Promotion Action Type “GD”
Transfer Action Type “GE”
Separation/Termination Action Type “GF”
Rehiring Action Type “ GG”
Extension of service Action Type “ GH”
Change in Pay Action Type “ GI”
Disciplinary Action, Action Type “ GJ”
Extension of Training Period Action Type “ GK”
Suspension Action Type “ GL”
Maintenance of Master data Action Type “ GM”
Confirmation of Training Action Type “ GN”

Initial Data Upload Action Type “ GO”
1.2.1.3.6.1.3 Set up Personnel Actions
Use
In this step, the personnel action type is defined that represent the personnel processes
in your enterprise. This means that within the personnel action hiring, all the info
types that must be maintained when hiring a new employee are displayed
automatically to the personnel administrator for processing.

options:
Transaction SPRO
Code
Actions  Set up personnel actions
2. Personnel Action Types:
1.2.1.3.6.1.4 Create Reasons for Personnel Actions
Use
In this step, the reasons for actions are determined.
Procedure

options:
Transaction SPRO
Code
Actions  Create reasons for personnel actions
2. Reason for Action:

1.2.1.3.6.1.5 User Group Dependency on Menus and Info Groups
Use
In this step, a menu of actions is defined which appears if the user chooses the function
"Personnel actions" in HR master data maintenance.
Procedure

options:
Transaction SPRO
Code
Actions Change action menu
2. Choose menu type M.
3. Entry table VV_T588C_M_ALO and make a check on User-
dep.
1.2.1.3.6.1.6 Action Menu
Use
The purpose of this activity is to define an action menu with various personnel action
e.g hiring action/Termination Action etc.
Procedure
options:
Actions Change action menu
2. Choose menu type M and menu 01.

3. Make the following entry:
1.2.1.3.7 Customizing User Interfaces
Use
In the chapter "Set up user interfaces", you define how the HR system
is to react when master data is maintained.
You can maintain master data in several ways:
1. You select the info type to be maintained directly from a choice of several
info types. You can determine this choice.
2. From an action menu, you choose an event which displays predetermined
info types, one after the other, for editing. For a certain action, you can define
both the info types to be displayed and also the action menu itself.
3. You can define fast data entry where only the most important fields from
several predetermined info types are grouped together on one entry screen.
Procedure

Customizing User Interfaces
Payroll
Configuration Guide
1. Purpose
The Configuration Guide describes how to set up the configuration of Payroll, without
the support of automated configuration tools.
2. Preparation
2.1 Prerequisites
Before you start installing this building block, the installation of the following building
blocks must have been completed:
Components Description
Company Code Financial Entity
PA, PSA Personnel Area And Personnel Sub Area
EG, ESG Employee Group and Employee Sub Group
G/L, Vendor Accounting Entities for posting of payroll results
3. Configuration
3.1 Basic Settings
3.1.1 Payroll Organization
3.1.1.1 Define Period Parameters
Use
The period parameter is needed to define specific payroll
periods with start and end dates.
Procedure
SAP menu Payroll: India Basic Settings  Payroll

Organization  Define Period Parameters
Transaction code SPRO
2. Choose New Entries
3. Put Period Parameter (in case of GIL we have maintained it

as 67- monthly-IN), Name. Choose Time Unit as Monthly and
the Start date
4. Choose Save (Ctrl + S)
3.1.1.2 Define Date Modifiers
Use
Date modifiers are required if there are different payment dates
for various payroll areas to which you assign the same period
parameters
Procedure
SAP menu Payroll: India Basic Settings  Payroll
Organization  Define Date Modifiers
2. In GIL, the standard modifier 01 has been used for all payroll
areas.
3.1.1.3 Check Payroll Accounting Area
Procedure
1. Access the activity using the following navigation options:
IMG menu Payroll: India Basic Settings  Payroll
Organization  Check Payroll Accounting Area
2. Choose Check Payroll Areas
4. Enter Payroll Area, Payroll Area Text, Period Parameter

(67), tick the check box for Run Payroll and put the Date
modifier(01)
Use
In this step, you set up the required payroll areas for your enterprise. The following
Payroll areas have been defined for GIL: O1 to OC (for Officer Category across all the
plants), S1-SC (for Staff/Sub staff category across all the plants) and W2 to WC (for
Worker category across all the plants except Head Office). Two additional Payroll areas
‘RJ’ and ‘CN’ have been defined for contractual worker and workers of category R & J
in Bangalore Plant
3.1.1.4 Generate Payroll Periods
Use
In this step, you use the report RPUCTP00 (Generate Payroll Periods) to generate the
date specifications for a selected period for the payroll periods that are to be valid in your
system. For each period parameter that is assigned to a payroll area, the system requires
the following date specifications:
 Start date and end date of each payroll period
 Payment date of each payroll period
When you execute the report RPUCTP00, the system creates these dates according to the
data that you enter in the report's selection screen.
Procedure
Organization  Generate Payroll Periods
2. Choose Generate Payroll Periods. Choose Country grouping

‘40’.
3. Maintain the following entries and run the report for each
payroll area
Period Date Start Date Final Year Start Date Payday No. Determin
Parameter Modifier of Rule of e Period
Fiscal year days Number
Number
67 01 01.01.2012 2012 0401 3 2 2
Put the tick for check box Carry out Table Change
3.1.1.5 Generate Calendar for Cumulations
Use
In this step, you use the report RPUCTP10 (Generate calendar for cumulations and
deductions) to define the assignment of payroll periods, which you created in the
previous step, to time intervals for cumulations and deductions (for example, monthly,
quarterly, half-yearly or yearly). The system requires this assignment to:
 Calculate cumulations correctly
 Distribute deductions amongst payroll periods correctly
How the assignment is made depends on whether there is a specific date for the payroll
period in the corresponding time interval. You can specify which date the assignment
is to be based on:
 Start date of the payroll periods
 End date of the payroll periods
 Payment date
Recommendation
Generate the calendar for cumulations and deductions for the same period as you did
for the payroll periods.
Procedure
Organization  Generate Calendar for Cumulations
2. Maintain the following entries and run the report for each
payroll area
Period Date Initial Year Final Year Start Date Determin
Parameter Modifier of e Period
Fiscal year Number
Numbe
67 01 2011 2012 0401
Put the tick for check box Carry out Table Change
3.2 Payroll Data
Use
In this section you define possible entries for the info-types that have a direct bearing
on payroll.
These are primarily info-types that contain wage type data.
3.2.1 Basic Pay
Use
In this section you define the input values for the Basic Pay info-type (0008), pay scale
reclassifications and standard pay increases. Basic pay includes wage types which are
valuated indirectly and/or can be included in the basis of valuation and/or can be
reduced in the case of unpaid absences or entries/withdrawals during a month.
This info-type makes a distinction between two groups of data:
 Data from the collective agreement such as pay scale type, area, group, level
and
 Maximum of forty wage types with amount or number, and unit.
3.2.1.1 Define EE Subgroup Grouping for PCR and Collective Agreement Provision
Use
In this step, you can define the groupings for the personnel calculation rules and
collective agreement provisions for all your employee groups and subgroups.
The employee subgroup grouping for the personnel calculation rule is required in
Payroll Accounting. The collective agreement provision grouping is required for
indirect valuation of wage types in the Basic Pay info-type (0008).
Procedure
options:

IMG menu Personnel Management  Personnel Administration
 Payroll Data  Basic Pay  Define EE Subgroup
Grouping for PCR and Collective Agreement
Provision.
2. Choose Country Grouping 40

3. Maintain ESG for PCR and CAP for all the employee
categories as shown below:
Employee ESG for ESG for

Category PCR CAP
Officer 3 3
Staff/Sub staff 2 2
Worker 2 2
3.2.1.2 Check Pay Scale Type
Use
In this step you set up your enterprise's collective agreement types (pay scale types for
short). The Basic Pay in info-type 0008 is derived from the pay scale type. By using the
internal key, you can assign a fixed internal mean for evaluations to optional pay scale
types.
Procedure
 Payroll Data  Basic Pay  Check Pay Scale
Type
3.2.1.3 Check Pay Scale Area
Use
In this section, you set up different collective agreement areas (pay scale areas for short)
in accordance with the collective agreement in your enterprise.
Procedure
options:
 Payroll Data  Basic Pay  Check Pay Scale
Area

3.2.1.4 Check Assignment of Pay Scale Structure to Enterprise Structure
Use
In this step, you assign collective agreement types and areas (pay scale types and areas
for short) to your personnel areas.
Procedure
options:
 Payroll Data  Basic Pay  Check Assignment of
Pay Scale Structure to Enterprise Structure
2. Maintain the following for each Personnel Area and

Personnel Sub Area as shown below:
Pers. Pers. Pay Scale Pay Scale

Area Subarea Area Type
1000 * HO GI
2100 * BN GI
2200 * BN GI
2300 * BN GI
2400 * BN GI
2500 * BN GI
3100 * SA GI
3200 * GO GI
3300 * AM GI
3400 * SA GI
4100 * DG GI
5100 * BA GI
3. Choose Save.
3.2.1.5 Set up payroll period for collective agreement provision
Use
In this step, you create the default value for the working hours per period. The default value for the
working hours per period for the info-type Basic Pay (0008) is determined by the info-type Planned
Working Time (0007). This is based on a monthly working time, i.e. the period is a month. It may be
necessary to enter an amount here that is valid for another period, for example, for a weekly wage. The
system will then suggest the default value for the working hours per period. You only have to complete
this step if a monthly payroll period does not apply to all of the employees in your enterprise.
Procedure
options:
 Payroll Data  Basic Pay  Set up payroll
period for collective agreement provision
2. Choose Pay Scale > Period Parameter Assignment

3. Maintain Period Parameter for Pay scale Area and Pay Scale
Type as shown below:
4. Choose Save
3.2.1.6 Wage Types
Use
In this section you define wage types. You define the wage type reactions and
characteristics when maintaining employee data.
3.2.1.6.1 Create wage type catalog
Use
In this step, you create your own wage types for the info-type Basic Pay (0008) by
copying the model wage types in the standard system. These copies are the wage types
you will use in further processing. You can also modify the copies to suit your
requirements. Only wage types for use in info-type Basic Pay (0008) are proposed in
this step.
Procedure
1. Access the activity using one of the following navigation options:
IMG menu Personnel Management  Personnel Administration 
Payroll Data  Basic Pay  Wage Types  Create wage type
catalog
2. Choose Copy
3. Choose a Wage type in the Original Wage type and put the New Wage type code,
Wage type Long Text, Text. Choose the row and click on Copy.
4. Remove the tick on Test Run and Copy
3.2.1.6.2 Check wage type group 'Basic Pay'
Use
In this section, you assign your wage types to a wage type group. Model wage types in the
standard system are already assigned groups.
Procedure
Payroll Data  Basic Pay  Wage Types  Check wage type
group 'Basic Pay'
2. If the wage type is not there in this list choose new entry and maintain Wage type.
The Wage type text is populated automatically.
3.2.1.6.3 Employee Subgroups for Primary Wage Type
Use
This section allows you to combine employee subgroups for primary wage types, i.e. you group the
employee subgroups already named to groups. You can use these groupings to specify which wage types
may be entered for which employee subgroups.
Procedure
Payroll Data  Basic Pay  Wage Types  Employee
Subgroups for Primary Wage Type
3. Maintain Grouping for different Employee Sub Groups.
ESG for Primary Wage

Employee Group Type
Officer 6
Staff/Sub staff 3
Worker 2
4. Choose Save
3.2.1.6.4 Personnel Sub areas for Primary Wage Type
Use
In this section you define your personnel sub-areas for primary wage types, i.e. you group together the
personnel sub-areas you have already defined. You can use these groupings to specify which wage types
may be entered for which personnel sub-areas.
Procedure
Payroll Data  Basic Pay  Wage Types  Personnel Sub-
areas for Primary Wage Type
2. Maintain Grouping for different Personnel Sub Areas. Grouping 1 is maintained for
ALL PSA
3. Choose Save
3.2.1.6.5 Check Wage Type Catalog
Use
This section allows you to change the characteristics of wage types created from model wage types.
These characteristics only describe how the wage types behave when entered and not how they behave in
payroll accounting.
Procedure
Payroll Data  Basic Pay  Wage Types  Check Wage Type
Catalog
3.2.1.6.5.1 Check wage type text
Use
This section allows you to change the texts of the wage types you have copied to your wage type area.
Procedure
Catalog  Check wage type text
2. Maintain the Wage type text in the Wage type long text field and Short text in the
Text column. Start date can also be maintained.
3. Choose Save
3.2.1.6.5.2 Check entry permissibility per info-type
Use
This section allows you to define the date on which wage types may be entered.
Procedure
Transaction code OH13
Catalog  Check entry permissibility per info-type
2. Wage type Start date is maintained automatically. It can be changed according to
requirement.
3. To Delimit entry of a Wage type Choose Delimit.
4. Enter Start Date of delimitation
3.2.1.6.5.3 Define Wage Type Permissibility for each PS and ESG
Use
In the previous two steps, you grouped your employee groups and subgroups and personnel sub areas
for primary wage types. In this section, you can define which wage types may be entered for your
groupings.
Procedure
Catalog  Define Wage Type Permissibility for each PS and
ESG
2. Select the Wage type and choose Details
3. Enter 1 for those PSA grouping and ESG grouping for which the Wage Type should
be allowed to enter.
4. Choose Save
3.2.1.6.5.4 Check wage type characteristics
Use
In this step, you define the wage type characteristics. These characteristics describe entering of wage
types and not how they behave in payroll.
Procedure
Catalog  Check wage type characteristics
3. Maintain the required inputs
Amount
Check Box Deduction WT : Put Tick if the WT is a Deduction Wage type
Minimum Amount : Put amount if restriction on minimum value is
required
Maximum Amount : Put amount if restriction on maximum value is
required
Check Box Add to Total : Put Tick if WT is to be added to Total
Input Combination
Amount, Number/Unit
The following entry combinations are possible:
Amount Number/unit Meaning
'X' 'X' either amount or number/unit
'-' '-' Neither amount nor number/unit
'+' '-' Amount essential, no number/unit
'-' '+' No amount, number/unit essential
'*' '*' At least amount or number/unit

Number/Unit
Time unit/meas. : Put the Unit applicable for the WT
Minimum Number : Put number if restriction is required for minimum value
Maximum Number : Put number if restriction is required for maximum value
Indirect valuation
Not Required
Time Leveling and Time Sheet
Not Required
Please refer to the screen shot below:
For normal payment wage type:

For deduction wage type:
4. Choose Save
3.2.2 Additional Payments
Use
Wage types that are paid irregularly and therefore are only entered when needed, are
stored in the Additional Payments info-type (0015).You can define wage types for this
info-type in this IMG activity.
3.2.2.1 Wage Types
Use
You define wage types in this step. You can specify their reactions and characteristics
when employee data is maintained in the system. These settings do not in any way
affect how wage types are handled in payroll.
3.2.2.1.1 Create wage type catalog
Use
In this step, you create your own wage types for the Additional Payments info-type
(0015) by copying the model wage types in the standard system. These copies are the
wage types that you can use in further processing. You can also modify these copies to
suit your requirements. Only wage types for use in the Additional Payments info-type
(0015) are proposed in this step.
Procedure
options:
Payroll Data  Additional Payments  Wage Types
 Create wage type catalog
4. Choose Copy
.
5. Choose a Wage type in the Original Wage type and put the New Wage type code,
Wage type Long Text, Text. Choose the row and click on Copy.
6. Remove the tick on Test Run and Copy
3.2.2.1.2 Check wage type group 'Additional Payments'
Use
You assign your wage types to a wage type group in this step. Model wage types in the
standard system are already assigned to groups.
Procedure
1. Follow the following navigation option:
Payroll Data  Additional Payments Wage Types 
Check wage type group 'Additional Payments'
2. Choose New entries and maintain the wage types that you want to enter in the
additional payments group
.
3. Choose Save
3.2.2.1.3 Define employee subgroup grouping for primary wage type
Use
This section allows you to combine employee subgroups for primary wage types, i.e. you group the
employee subgroups already named to groups. You can use these groupings to specify which wage types
may be entered for which employee subgroups.
Procedure

Payroll Data  Additional Payments  Wage Types 
Employee Subgroups for Primary Wage Type
3. Maintain Grouping for different Employee Sub Groups as given below
ESG for Primary Wage

Employee Group Type
Officer 6
Staff/Sub staff 3
Worker 2
4. Choose Save
This ESG grouping is automatically taken from the Basic Pay Grouping but it can be
changed according to requirement
3.2.2.1.4 Personnel Sub areas for Primary Wage Type
Use
In this section you define your personnel sub areas for primary wage types, i.e. you group together the
personnel sub areas you have already defined. You can use these groupings to specify which wage types
may be entered for which personnel sub areas.
Procedure
Payroll Data  Additional Payments  Wage Types 
Personnel Sub-areas for Primary Wage Type
2. Maintain Grouping for different Personnel Sub Areas. Grouping 1 is maintained for
PSA.
3. Choose Save
This PSA grouping is taken automatically from the Basic Pay Grouping This however
can be changed according to requirement.
Use
In this section, you can change the characteristics of the wage types you have just
created from model wage types. These characteristics only describe the reaction of
wage types when data is entered and not when payroll is run.
Procedure
options:
Check Wage Type Catalog
3.2.2.1.5.1 Check wage type text
Use
This step allows you to change the texts of the sample wage types you have copied into your wage type
area.
Procedure
options:
Check Wage Type Catalog  Check wage type text
2. Maintain the Wage type text in the Wage type long text field and Short text in the
Text column. Start date can also be maintained.
3. Choose Save
3.2.2.1.5.2 Check Entry Permissibility for Additional Payments
Use
In this step, you specify the time frame when wage types can be entered in this info-type.
Procedure
Transaction code OH13
Payroll Data  Additional Payments  Wage Types  Check
Wage Type Catalog  Check Entry Permissibility for
Additional Payments
requirement. You can maintain the number of times that the wage type would be
entered - Once or Several Times. Please choose the appropriate radio button.
5. Two entries (rows) are created for the wage type. Choose the entry that needs to be
deleted and choose Edit  Delete
6. Choose Save
3.2.2.1.5.3 Define Wage Type Permissibility for each PS and ESG
Use
In the previous two steps, you grouped your employee groups and subgroups and personnel sub areas
for primary wage types. In this section, you can define which wage types may be entered for your
groupings.
Procedure
Wage Type Catalog  Define Wage Type Permissibility for
each PS and ESG
3. Enter 1 for those PSA grouping and ESG grouping fro which the Wage Type should
be allowed to enter.
4. Choose Save
3.2.2.1.5.4 Check wage type characteristics
Use
In this step, you define the wage type characteristics. These characteristics describe entering of wage
types and not how they behave in payroll.
Procedure
Wage Type Catalog  Check wage type characteristics
3. Maintain the required inputs

Amount
Check Box Deduction WT : Put Tick if the WT is a Deduction Wage type
Minimum Amount : Put amount if restriction on minimum value is
required
Maximum Amount : Put amount if restriction on maximum value is
required
Check Box Add to Total : Put Tick if WT is to be added to Total
Input Combination
Amount, Number/Unit
The following entry combinations are possible:
Amount Number/unit Meaning
'X' 'X' either amount or number/unit
'-' '-' Neither amount nor number/unit
'+' '-' Amount essential, no number/unit
'-' '+' No amount, number/unit essential
'*' '*' At least amount or number/unit

Number/Unit
Time unit/meas. : Put the Unit applicable for the WT
Minimum Number : Put number if restriction is required for minimum value
Maximum Number : Put number if restriction is required for maximum value
Indirect valuation
Not Required
Time Leveling and Time Sheet
Not Required
For details, refer to the screen shot given below:

4. Choose Save
There are some wage types which need to be entered in Info-type 0014 as a recurring
payment. For this we need to put entry permissibility of these wage types in Recurring
Payments.
3.2.3 Recurring Payments and Deductions
Use
In the info-type Recurring Payments/Deductions (0014), you can save amounts for a
certain wage type that are to be repeatedly paid out or withheld via payroll. 'Recurring
payments/deductions' are additional wage elements that as a rule are not paid
out/withheld in every payroll period, but according to a fixed periodicity, unlike
'Additional payments'. In this step, you can define wage types which are either aid or
withheld regularly.
3.2.3.1 Wage Types
Use
You define wage types in this step. You can specify their reactions and characteristics
when employee data is maintained in the system. These settings do not in any way
affect how wage types are handled in payroll.
Use
In this section, you can change the characteristics of the wage types you have just
created from model wage types. These characteristics only describe the reaction of
wage types when data is entered and not when payroll is run.
Procedure
options:
Check Wage Type Catalog
3.2.3.1.1.1 Check entry permissibility per info-type
Use
In this step, you specify when wage types can be entered in this info-type.
Procedure
Payroll Data  Recurring Payments and Deductions  Wage
Types  Check Wage Type Catalog  Check entry
permissibility per info-type
requirement. You can maintain the number of times that the wage type would be
entered - Once or Several Times. Please choose the appropriate radio button.

5. Two entries (rows) are created for the wage type. Choose the entry that needs to be
deleted and choose Edit  Delete
6. Choose Save
3.2.4 Absences
Use
In the following steps, you can define different rules for processing absences in payroll. You can specify
which calculation basis should be used to valuate a paid absence, and also that that allowances are
granted for certain absences, while others involve deductions.
3.2.4.1 Describe Absence Valuation Rules
Use
In this activity, you describe absences according to your company requirements

regarding absence valuation in Payroll. You describe absences by defining rules for
absence valuation.
The description is part of the key you use in the following steps to set rules for absence
valuation.
Procedure
IMG menu Payroll  Payroll: India Absences  Describe Absence
Valuation Rules
2. Choose New Entries and maintain Valuation Rule and Description

3. Choose Save
3.2.4.2 Group Absences for Absence Valuation
Use
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 define how specific employee absences must be valuated
in payroll in the subsequent operation phases.
Procedure
IMG menu Payroll  Payroll: India Absences  Group Absences for
Absence Valuation
2. Choose PSG grouping 10 (for Kolkata HO) and maintain Valuation Rule for the
absences
3. Choose Save
3.2.4.3 Valuation of Absences
Use
In the following steps, you specify the regulations for valuating absences in Payroll.
The actual valuation of the absences (in monetary amounts) takes place during the
payroll run and is based on the wage types that are already specified or that must be
formed.
3.2.4.3.1 Create Counting Classes for Absence Valuation
Use
In this IMG activity you define counting classes and specify regulations regarding which absences are
collected in the counting classes, and what percentage of them are paid or unpaid. You can specify up to
10 counting classes for each absence valuation rule.
Counting classes are used in order to form "buckets" to valuate paid and unpaid absences:
1. For factoring to reduce salaries for unpaid absences
In the standard SAP R/3 System, all counting classes that contain unpaid
absences are processed together for factoring. A prerequisite of factoring is that
you have assigned the paid absences to at least one counting class.
This means that you should not collect unpaid absences in more than one
counting class if you use standard factoring (schema xAL0), otherwise the
absences would be valuated twice.
If you want to form several counting classes for unpaid absences, you must
specify explicitly which counting classes should be taken into account in
factoring.
2. To generate statistics and for cost accounting
You can collect absence times in the counting classes in order to fill wage types
and evaluate the cumulated values for cost accounting or statistical purposes.
You can access the counting classes using operation NUM.
Both paid and unpaid absences are usually collected in one counting class. The following rule applies to
the further course of payroll.
Procedure
IMG menu Payroll  Payroll: India Absences Valuation of Absences
 Create Counting Classes for Absence Valuation
2. Choose Activity
3. Choose New Entries and maintain Counting Class and CC description
4. Choose Activity
5. Choose entry, go to Details
3.2.5. Pay Scale Groupings
Use
In this section, you define pay scale groupings for allowances. These groupings are
used to select employees based on their eligible compensation benefits.
To achieve this, each pay scale grouping is assigned to a combination of pay scale level,
pay scale area, pay scale type, pay scale group and employee subgroup grouping for
Collective Agreement Provision (ESG for CAP).
These groupings determine the eligibility of the employees for various allowances,
reimbursements and perks.
To do this you:
 Define pay scale groupings for allowances
 Assign pay scale groupings for allowances.
3.2.5.1 Define Pay Scale Groupings for Allowances
Use
In this activity, you define pay scale groupings for allowances to differentiate between
employee groups. These groupings determine which benefits apply to a particular
group of employees.
Procedure
IMG menu Payroll  Payroll: India Pay Scale Groupings  Define Pay
Scale Groupings for Allowances
2. Choose New Entries and maintain Allowance Grouping and Allowance Grouping
description
3. Choose Save
3.2.5.2 Assign Pay Scale Groupings for Allowances
Use
In this activity you assign pay parameters to each 'Pay Scale groupings for Allowance'
created in the previous step, based on:
 Pay Scale Area
 Pay Scale Type
 Pay Scale Group
 Pay Scale Level and
 Employee Sub Grouping for Collective Agreement Provision (ESG for CAP)
Procedure
IMG menu Payroll  Payroll: India Pay Scale Groupings  Assign Pay
Scale Groupings for Allowances
2. Assign Allowance Grouping for the Pay scale type, Group and Level
3. Choose Save
3.2.6 Basic Salary for India
Use
In this section of the Implementation Guide (IMG), you define rules that govern the employee's basic
salary.
Basic salary is a statutory monthly remuneration applicable to all employees in an organization. Most
components of salary in the organization are calculated, based on the employee's basic salary, personal
pay and Dearness Allowance.
Personal pay is a component of salary used to pay the difference in remuneration as an adjustment
payment. This is subject to company rules in cases such as, when a new employee does not fit in the
employer's pre-defined salary brackets and the employer needs to make a payment to match the agreed
remuneration.
An employee's basic salary is agreed upon during recruitment and is updated in case of status changes
such as a promotion, or transfer and so on.
A basic salary range is normally fixed for a pay scale grouping for allowance and could be incremented
periodically. These increments could be paid as a fixed amount or as a percentage of a base amount
depending on the company's policy.
3.2.6.1 Assign Basic Wage Types to Grouping for Allowances
Use
In this activity, you assign a basic wage type and a Personal Pay wage type to
each pay scale grouping for allowances created under Pay Scale Groupings -> Define
Pay Scale Groupings for Allowances. These wage types are assigned to the pay scale
groupings for the purpose of identifying a wage type and associating this for the
purpose of payment of the base component of salary refered to as Basic. Basic pay, in
some cases along with the dearness allowance component is used to calculate other
allowances.
Procedure
IMG menu Payroll  Payroll: India Basic Salary for India  Assign
Basic Wage Types to Grouping for Allowances
2. Choose New Entries and maintain Allowance Grouping, Basic WT, From Date and
To Date
3. Choose Save
3.2.7 Reimbursements, Allowances and Perks
Use
Allowances are a part of the employee's total salary, which is normally paid through
the pay slip and are paid on a regular basis. These could be monthly, like House Rent
Allowance (HRA) or on an annual basis like Leave Travel Allowance (LTA). These are
always cash components and not paid in kind.
Reimbursements are those components which are paid against a claim or an expense
incurred by an employee like medical reimbursement against submission of bills.
These may have maximum limits with additional rules applicable when availed.
Perks are that component of the total salary, which are generally availed by the
employee in terms of kind on which the employer specifies a limit. In some cases, no
amounts are specified and it is claimed against actual expenses incurred.
The eligibility and amounts for any of these components depend on the geographical
location, department, grade and employee group that he or she belongs to, and the
years of experience in the organization.
Other factors that control these amounts are number of dependents, children, area,
job, marital status and so on.
Unclaimed reimbursements and perks as per the company's law are:
 Given to employees at the end of the year as an allowance.
 Carried forward if the employee chooses
 Lapse after a specified period
3.2.7.1 Assign Wage Type Model for Pay Scale Grouping for Allowances
Use
In this activity, you assign ' wage type models' to each ' pay scale grouping for allowances' that
was created. The Wage Type Model will indicate which benefits would apply to, or what amounts will be
deducted from a particular Pay Scale Grouping for Allowance.
Wage Type Models are a set of 'Wage Types (WTs)' used by SAP. These Wage Types can be an amount or
a deduction.
The Wage Type Models must be prefixed with '20/' to indicate that, a maximum of 20 wage types can be
stored in a particular WT model.
Procedure
IMG menu Payroll  Payroll: India Reimbursements, Allowances and
Perks  Assign Wage Type Model for Pay Scale Grouping for
Allowances
2. Choose New Entries and maintain Allowance Grouping and WT model

3. Choose Save
3.2.7.2 Maintain Default Wage Types for Basic Pay
Use
In this step, you can set up default wage types based on your internal company structure for the Basic
Pay infotype (0008) using the feature Planned remuneration specification (LGMST) defined in
the previous step
Procedure
IMG menu Payroll  Payroll: India Reimbursements, Allowances and
Perks  Maintain Default Wage Types for Basic Pay
2. Choose New Entries and maintain WT model, Sequence, Mode, WT

3. Choose Save
3.2.8 Retirement Benefits
Use
In this section of the Implementation Guide (IMG), you make settings that define the
employer's contributions towards funds that support the employee's retirement plan.
You set up the statutory and non-statutory components of Gratuity and

Superannuation respectively, where you maintain the company rates as necessary.
3.2.8.1 Gratuity
Use
In this section of the Implementation Guide (IMG), you set up the gratuity component
for Payroll India.
Gratuity is a benefit provided to the employee on the cessation of his or her services.
This is a statutory component, applicable to all employees of an organization. The
employer contributes to a gratuity trust so as to provide for payment at the time of
termination or retirement.
3.2.8.1.1 Maintain Gratuity Trust ID
Use
In this activity, you define the different Gratuity trusts maintained by your company.
Procedure
IMG menu Payroll  Payroll: India Retirement Benefits  Gratuity 
Maintain Gratuity Trust ID
2. Maintain GRATUITY TRUST ID
3. Choose Save
3.2.8.1.2 Maintain Gratuity Contrib. Freq. and Related Wage Types
Use
In this activity, you define
 whether the contribution to the gratuity trust is to be made annually or monthly
 whether the annual contribution is to be made at the end of the financial year or
calendar year
 the wage type for gratuity contributions made on a monthly basis
 the wage type for gratuity contributions made on an annual basis
 The wage type used to calculate the provisional monthly gratuity contributions,
in case the contribution to the trust is made annually. This wage type needs to
be defined only if provisional wage types per month need to be calculated and
posted to a provisional account.
Procedure
Maintain Gratuity Contrib. Freq. and Related Wage Types
2. Choose New Entries maintain GRA ID, Frequency Contribution, Monthly
Contribution, Monthly WT, Annual WT, Prov. WT
3. Choose Save
3.2.8.1.3 Define Contribution Rates for Gratuity
Use
In this activity, you define the contribution rates used to calculate the gratuity
contributions made by the employer.
These company-specific rules are linked to gratuity funds and enable the system to
calculate and store gratuity amounts during the payroll run.
Procedure
Define Contribution Rates for Gratuity
2. Choose Country Grouping ‘40’. Choose New Entries maintain all. group, GRA ID,
GA Contribution, Start Date, End Date
3.2.8.1.4 Maintain the Eligibility Years for Gratuity
Use
3. Choose Save
In this step, you maintain the 'GRTYR' constant for contribution to gratuity. The
minimum number of years of service after which the employer begins to contribute
towards gratuity is specified here.
Procedure
Maintain the Eligibility Years for Gratuity
2. Choose Country Grouping ‘40’. Choose New Entries maintain ALL. group, GRA ID,
3. Choose Save
3.2.8.1.5 Check for Gratuity Contribution
Use
In this activity, you modify the personnel calculation rule for Payroll Accounting to
identify whether gratuity contribution took place.
This rule is used in conjunction with an IF statement. It passes a TRUE or FALSE

value based on which the IF loop is processed.
In the retro scenario certain processing need to happen based on whether the
employee has contributed to gratuity or not.
This rule first reads the amount of the gratuity monthly contribution wage type /3G1
from IT and passes False if amount is greater than zero, otherwise it reads the amount
of the gratuity provisional contribution wage type /3G3 from IT and passes False if
amount is greater than zero and True if otherwise.
Procedure
Check for Gratuity Contribution
2. No changes required. Standard settings.
3.2.8.2 Superannuation
Use
In this section of the Implementation Guide (IMG), you set up the Superannuation
component for Payroll India.
Superannuation is a non-statutory benefit provided to the employee on the cessation of
his or her services. The employer contributes to a Superannuation trust so as to
provide for payment at the time of retirement.
3.2.8.2.1 Maintain Superannuation Trust ID
Use
In this activity you define the different Superannuation trusts maintained by your
company.
Procedure
IMG menu Payroll  Payroll: India Retirement Benefits 
Superannuation  Maintain Superannuation Trust ID
2. Maintain SAN ID and Text
3. Choose Save
3.2.8.2.2 Maintain Superannuation Contrib. Freq and Rel. Wage Types
Use
In this activity, you define
 whether the contribution to the superannuation trust is to be made annually or

monthly
 whether the annual contribution is to be made at the end of the financial year or
calendar year
 the wage type for superannuation contributions made on a monthly basis
 the wage type for superannuation contributions made on an annual basis
 the wage type used to calculate the provisional monthly superannuation

contributions, in case the contribution to the trust is made annually. This wage
type needs to be defined only if provisional wage types per month need to be
calculated and posted to a provisional account.
Procedure
Superannuation  Maintain Superannuation Contrib. Freq
and Rel. Wage Types
2. Choose New Entries maintain SAN ID, Frequency Contribution, Monthly
Contribution, Monthly WT, Annual WT, Prov. WT
3. Choose Save
3.2.8.2.3 Define Contribution Rates for Superannuation
Use
In this activity, you:
 Define the contribution rates used to calculate superannuation contributions

made by the employer
 Enter the company-specific data
These rates are linked to superannuation funds and enable the system to calculate and
store superannuation amounts during the payroll run.
Procedure
Superannuation  Define Contribution Rates for
Superannuation
2. Choose Country Grouping ‘40’. Choose New Entries maintain ALL. Grp, SAN ID,
SA Contribution, Start Date, End Date
3. Choose Save
3.2.8.2.4 Maintain Eligibility Details for Superannuation
Use
In this activity, you set up the eligibility details for superannuation. This is used to set
the criteria on which the employee and employer contribute to the superannuation
fund and it's relevant tax implications.
Procedure

Superannuation  Maintain Eligibility Details for
Superannuation
2. Choose Country Grouping ‘40’. Choose New Entries maintain ALL. Grp, GRA ID,
3. Choose Save and Activate -: - Activate Icon
3.2.9 Statutory Social Contribution
Use
In this section of the Implementation Guide (IMG), you set up the statutory
components which are contributed by the employee and the employer, which affect the
calculation of tax during a payroll run.
3.2.9.1 Provident Fund
Use
Provident Fund (PF) is a statutory contribution scheme applicable to all employees.

The only exceptions are employee's in their first job whose basic salary is Rs.5000 or
more and who have opted not to contribute. Contributions are based on a percentage
set by the Government. Both the employee and the employer contribute to this fund.
The contribution percentage may vary provided the amount of contribution is equal to
or more than the statutory amount.
Pension is a benefit in which an employee receives regular payment from the employer
after retirement or termination provided he or she meets the eligibility criteria. In case
of the employees death, a person nominated by the employee continues receives
regular payment. In both cases, this is a life time benefit where the recipient continues
to receive a pension until death.
The contribution to pension is deducted from the employer's contribution to PF.
Employees deposit linked insurance (EDLI) is an insurance payment that is linked to

the average balance in the provident fund account of an employee. The amount is
payable to employees nominee or legal heir in case of the employee's death.
EDLI contributions are made only by the employer and are applicable to all
establishments covered under the Provident Fund Act with the exception of
establishments exempted by government notification and the tea factories in state of
Assam.
There are three types of PF trusts:
 Excluded Trust, where no contributions are made towards EDLI, EDLI

administration or Pension. The entire contribution is made to the trust in the
form of Provident Fund.
 Exempted Trust, where EDLI, EDLI Admin and Pension (8.33%) are
contributed to the Government. Provident fund is maintained by a trust other
than Regional provident fund commissioner (RPFC).
 Regional Provident Fund Commissioner (RPFC) Trust, where all the

contributions are made to the government.
Based on the type of trust, contribution towards PF, Pension and EDLI may vary.
3.2.9.1.1 Define Trust Details for Provident Fund
Use
In this activity, you define the different Provident Fund (PF) trusts that the employer
and employee contribute to, and set the wage types used to calculate contributions
made to the trusts and it's associated handling charges.
Procedure
IMG menu Payroll  Payroll: India Statutory Social Contribution
Provident Fund  Define Trust Details for Provident Fund
2. Choose New Entries. Maintain Trust, Trust name, Trust type and the different WTs
3. Choose Save
3.2.9.1.2 Assign Company Rates for Provident Fund
Use
In this activity, you assign the company rates for contribution towards Provident Fund.
This is a non-statutory rate and can be any amount that is equal to or greater than the
statutory rate.
Procedure
Provident Fund  Assign Company Rates for Provident Fund
2. Choose New Entries maintain All group, EE Contr., From and To
3. Choose Save
3.2.9.1.3 Define PF Trust Validity Period
Use
In this activity you define the Provident Fund (PF) trusts applicable to the company.
The provident fund trusts defined in this step are used as a basis for selection in the
info type (587) Provident Fund Contributions.
Procedure
Provident Fund  Define PF Trust Validity Period
2. Choose New Entries maintain Trust, To, From, Trust int. EDLI payee
3. Choose Save
3.2.9.1.4 Maintain Contribution Details for Provident Fund
Use
This feature returns Provident Fund (PF) contribution type, PF Ref Number and
Pension Ref Number based on the employee's personnel area, personnel subarea and
PF trust ID.
Use: This is used in payroll as well as reports.
Procedure
Provident Fund  Maintain Contribution Details for
Provident Fund
2. Maintain the feature 40EPF
3. Choose Save and Activate
3.2.9.1.5 Define Contribution type for Statutory rates for Provident Fund
Use
In this activity, you define the Contribution type in the name range A to Z. For every
Contribution type, you must also specify percentages for:
 EE (Employee) Contribution
 ER (Employer) Contribution
 ER (Employer) Pension Contribution

 PF Admin Charges
 EDLI Contribution
 EDLI Admin
 PF Interest
Procedure
Provident Fund  Define Contribution type for Statutory
rates for Provident Fund
2. Choose New entries and maintain the contribution rates
3. Choose Save
3.2.9.2 Employees' State Insurance
Use
Employees' State Insurance (ESI) is a benefit provided to any employee earning wages
below a specified limit to provide for:
 Hospital facilities and out-patient facilities
 Medicines provided by the hospital
 Compensation in case of accident or death
 Leave subject to ESI hospitals or doctors certificate of ill-health
The ESI fund requires contributions from employees and the employer. There are
statutory rates set by the government. These contributions are made on a monthly
basis and remitted to the ESI Corporation by the employer who deducts the employees
contribution from his or her salary or wages.
The ESI Corporation assigns a reference number for each of your companys branches
in different locations and also allots an individual identification number, known as an
ESI number, to each employee covered under the scheme.
For the purpose of employees' state insurance data processing, you must define
groupings that group all personnel areas and subareas that belong to the same branch
office and have the same reference numbers. As your company may have several
branches, each branch is assigned a reference number by the ESI Corporation which
you can then group according to personnel areas and subareas.
3.2.9.2.1 Maintain ESI Eligibility Limit
Use
In this activity, you can set up the values of the ESI Eligibility Limit Constant (ESILT)
and Min. Avg. Wage per day Constant (ESIMN) of the table view Payroll Constants
(V_T511P). These values are set by the government. You must change the value of
these constants only in case of legal changes.
An employee is eligible for ESI only if the ESI Basis of the employee is less than or
equal to the amount stored in the ESI Eligibility Limit Constant (ESILT). Both,
employee and employer contributions are made in this case.
If the average wage per day of the employee is less than or equal to the amount stored
in the Min.Avg.Wage per day Constant (ESIMN) of the table view Payroll Constants
(V_T511P), only the employer makes an ESI contribution of 4.75% of the ESI Basis.
Procedure
IMG menu Payroll  Payroll: India Statutory Social Contribution 
Employees' State Insurance  Maintain ESI Eligibility Limit
2. Choose Activity
Maintain ESI basis limit

Choose Country grouping ‘40’
3. Choose Save
4. Choose Activity. Maintain avg. Wage per day limit.
5. Maintain the Avg. Wage limit
6. Choose Save
3.2.9.2.2 Maintain Number of Working Days in a Month
Use
In this activity, you can maintain the value of the No. of days in month for calc Constant (DYSMN) of
table view Payroll Constants (V_T511K).
The value of this constant is used to calculate the Average wage per day for an employee. Average wage
per day for an employee is the value of ESI Basis Nominal Wage Type (/113) divided by the value in
this constant.
Average wage per day for an employee is used to determine the eligibility of employee ESI
contribution.
Procedure
Employees' State Insurance  Maintain Number of Working
Days in a Month
2. Maintain the constant DYSMN
3. Choose Save
3.2.9.2.3 Define Personnel Area and Subarea Groupings for ESI
Use
In this activity, you define the personnel area and subarea groupings for Employees'
State Insurance (ESI) which are used to group all personnel areas and subareas that
have the same ESI reference number.
Procedure
Employees' State Insurance  Define Personnel Area and
Subarea Groupings for ESI
2. Choose New Entries maintain PS Group ESI, Employer’s Ref., ESI Group text
3. The Adress of each ESI grp can be maintained in the address icon
4. Choose Save
3.2.9.2.4 Assign ESI Groupings for Personnel Area and Subarea
Use
In this activity, you assign a personnel area and subarea to each grouping for Employee
State Insurance (ESI) created in the previous step.
Procedure
Employees' State Insurance  Assign ESI Groupings for
Personnel Area and Subarea
2. Maintain PS Grouping for ESI for each of the PA, PSA
3. Choose Save
3.2.9.2.5 Maintain Contribution Rates for ESI
Use
In this activity, you assign employee and the employer contribution rates to the
personnel area and subarea groupings for ESI. These rates are valid for the time period
specified and may vary depending on the respective state laws
Procedure
Employees' State Insurance  Maintain Contribution Rates
for ESI
2. Choose New Entries and maintain for each PS Grouping for ESI, EE Contr.
Percentage and ER Contr. Percentage with Start date and End date
3. Choose Save
3.2.10. Other Statutory and Non-Statutory Deductions
3.2.10.1 Assign Universal Contribution Groupings for Universal Contribution Types
Use
In this IMG activity, you assign Universal Contribution Groupings for Universal Contribution
Types. These Universal Contribution Groupings are a combination of Personnel Area and Subarea.
Note:
In this activity, you can maintain groupings only for standard Universal Types, for example, LWF, ESI.
To assign a grouping for a customer specific Universal Type, use include PCBURZIN0.
Procedure
IMG menu Payroll  Payroll: India Other Statutory and Non-
Statutory Deductions  Assign Universal Contribution
Groupings for Universal Contribution Types
2. Maintain Grouping for each PA, PSA combination. ESI, PT, Tax group would
automatically default from the relevant nodes. In this node we need to maintain for
LWF grouping
3. Choose Save
3.2.10.1.1 Assign State for Universal Contribution Grouping
Use
In this activity, you assign the company rates for contribution towards Provident Fund.
This is a non-statutory rate and can be any amount that is equal to or greater than the
statutory rate.
Procedure
Statutory Deduction  Assign State for Universal
Contribution Grouping
2. Choose New Entries and maintain Univ. Group, Univ. Type, Univ. Group text,
Region, Start Date, End date
3. Choose Save
3.2.10.1.2. Assign Slab Code and Other Parameters for Each State of a Univ. Type
Use
In this IMG activity, you maintain the following details for a Universal Contribution Type and a Region
(State):
 Slab Code
 First period of contribution, for example, 3 that corresponds to the month of

June
 Contribution frequency, for example, annually, half-yearly
 Employee and employer contribution wage types
 Function name, in case you want to calculate the contribution amounts using
your own method that is different from the one maintained in table view
Contribution Value for Each Slab (V_T7INU5).
Other Statutory and Non-Statutory Deductions payroll function (INUCD) reads this table
view.
Procedure
Statutory Deduction  Assign Slab Code and Other
Parameters for Each State of a Univ. Type
2. Choose New Entries and maintain Univ. Type, Region, Slab Code, First Period,
Contr. Freq.
3. Choose Save
3.2.10.1.3. Assign Contribution Value for Each Slab
Use
In this IMG activity, you maintain the following details for a Slab Code:
 Salary ranges
Note: The system reads the amount of the wage type that you have maintained
as parameter 2 of Other Statutory and Non-Statutory Deductions
payroll function (INUCD) to determine the salary range in which the
employee falls.
 Employee contribution amount or rate for each salary range
 Employer contribution amount or rate for each salary range
Other Statutory and Non-Statutory Deductions payroll function (INUCD) reads this table
view to determine the employee and employer contributions for Other Statutory and Non-Statutory
Deductions of various types, for example, Labor Welfare Fund (LWF).
Note: Other Statutory and Non-Statutory Deductions payroll function (INUCD) reads this table view
only if you have not maintained Function Name in the previous IMG activity Assign Slab Code and
Other Parameters for Each State
Procedure
Statutory Deduction  Assign Contribution Value for Each
Slab
2. Choose New Entries and maintain Slab Code, Sr. no, Range End, EE contr.
Amount, ER contr. amount
3. Choose Save
3.2.11 Professional Tax
Use
Professional Tax is a tax on employment and it is deducted from the wages payable to
all employees with the exception of certain categories such as disabled and so on but
may vary in different States as per the laws that govern them.
It is a statutory deduction administered by the State. Deductions are based on the

salary slabs for all the employees who are specified by the respective state governments
or local bodies (authorities).
3.2.11.1 Define Professional Tax Grouping Details
Use
In this activity, you define the personnel area and subarea groupings for Professional
Tax (PTax) which are used to group all personnel areas and subareas that contribute to
the same professional tax circle.
Procedure
IMG menu Payroll  Payroll: India  Professional Tax  Define
Professional Tax Grouping Details
2. Choose New Entries and maintain the PtGrp, PtGrp description, Region, Zone no,
DIVSN, Regn Certificate, Office circle name, Ptax circle, Start date and End Date
3. Choose Save
3.2.11.2 Assign P Tax Groupings for Personnel Areas and Subareas
Use
In this activity, you assign professional tax groupings created in the previous step to
personnel areas and subareas.
Procedure
IMG menu Payroll  Payroll: India  Professional Tax  Assign PTax
Groupings for Personnel Areas and Subareas
2. Maintain the PT Grp for each PA, PSA
3. Choose Save
3.2.11.3 Assign Amounts for Professional Tax Deduction
Use
In this activity, you assign a Professional Tax (Ptax) rate to a slab code. Slabs are salary
brackets as specified for a State by the respective State Government or local authority.
To assign rates to slab codes for a state, for example Gujarat, you must first define the
slab code and then assign serial numbers, maximum limits and the rates.
Procedure

IMG menu Payroll  Payroll: India  Professional Tax  Assign
Amounts for Professional Tax Deduction
2. Choose New Entries and maintain the Slab code, Sr. No, Range End, P tax amount
3. Choose Save
3.2.11.4 Maintain Method and Form Layout for P Tax Groupings
Use
In this activity, you assign the calculation method used for a slab code in a region and specify the layout
of the form to be submitted.
The form layout and the method used for calculation, refer to a time dependent entry in the HR
Subroutines (T596F) table.
Procedure
IMG menu Payroll  Payroll: India  Professional Tax  Maintain
Method and Form Layout for P Tax Groupings
2. Choose New Entries and maintain the Slab code, Method, Form Layout, Basis Type,
Type, Start date and End date
3. Choose Save
3.2.12 Tax
Use
In this section of the Implementation Guide (IMG), you make the settings that affect
the calculation of tax during a payroll run.
Income tax is deducted from all employees’ gross salary for as per the Income Tax Act
of 1961. This is deducted by the employer on a monthly basis and is transferred to a
particular bank under a unique identification as specified.
A summary of the tax return for all employees is submitted by the employer to the local
tax authority at the end of each financial year. A summarized calculation of the tax
returns is given to the employee at the end of the financial year or on termination of
employment.
The laws for the calculation of taxes are subject to change with changes in the Income
tax act.
In addition to overall taxation, statutory requirements enforce different kinds of tax

exemption for different types of allowances.
Some exemptions are based on limits with specified frequency (for example, monthly
or annual) depending on the individual’s specific data.
To set up this component, you:
1. Define tax slabs and assign rates for calculation

2. Define and assign personnel area and subarea groupings for tax
3. Set up legal data for deductions and rebate under section 80 and section 88
4. Maintain statutory constants to define the fair rental value in metro and non-
metro cities, long term capital gain rates and the perquisite value of furniture
and the benefit of a helper
5. Set up the tax liability on reimbursements, allowances and perks
3.2.12.1 Basic Settings
Use
In this section, you set up the basic components necessary to enable the calculation of
tax during a payroll run.
1. Define personnel area and subarea groupings for tax

2. Assign tax groupings for personnel areas and subareas
3.2.12.1.1 Define Personnel Area and Subarea Groupings for Tax
Use
In this activity, you create the personnel area and subarea groupings for tax to group
employees who belong to the same tax office circle. In the next step you assign the
groupings to the relevant personnel areas and subareas.
Procedure
IMG menu Payroll  Payroll: India  Tax  Basic Settings  Define
Personnel Area and Subarea Groupings for Tax
2. No maintenance required. Standard settings.
3. Choose Save
3.2.12.1.2 Assign Tax Groupings for Personnel Areas and Subareas
Use
In this activity, you assign the tax groupings created in the previous step to personnel
areas and subareas.
Procedure
IMG menu Payroll  Payroll: India  Tax  Basic Settings  Assign
Tax Groupings for Personnel Areas and Subareas
2. Maintain PS grouping for tax for each PA, PSA

3. Choose Save
3.2.12.1.3 Maintain Feature to Return Employer IncomeTax Related Data
Use
In this feature, you set up the criteria to return the following information about the
employer based on the company code:
 Employer Classification Code
 Employer Permanent Account Number (PAN)
 Employer Tax Account Number (TAN)
 Employer GIR Number
These values are required for the purpose of reporting.
The feature returns a table with the above information as records.

3.2.12.2 Tax Liability on Reimbursements, Allowances and Perks
Use
In this section, you set up the basic components necessary to enable the calculation of
tax during a payroll run.
1. Define personnel area and subarea groupings for tax

2. Assign tax groupings for personnel areas and subareas
3.2.12.2.1 Define Tax Codes
Use
In this section of the Implementation Guide (IMG), you make the settings that affect
the calculation of tax on reimbursements, allowances and perks during a payroll run.
To set up this component you:
 Define tax codes
 Assign the tax code limits, wage types and other criteria to a tax code
Procedure
IMG menu Payroll  Payroll: India  Tax  Tax Liability on
Reimbursements, Allowances and Perks  Define Tax Codes
2. Choose Country Grouping ‘40’.Choose New Entries maintain Tax code and tax code
description.
3. Choose Save
3.2.12.2.2 Assign Tax Code Limits to Wage Types
Use
In this activity, you assign the tax code limits, wage types and other criteria to a tax
code. This value is taken into account when calculating the employees tax liabilities on
certain benefits.
Procedure
IMG menu Payroll  Payroll: India  Tax  Tax Liability on
Reimbursements, Allowances and Perks  Assign Tax Code
Limits to Wage Types
2. Maintain WT, Tax type, Frequency, Exempt It, Tax code, Currency, Start, To
3. Choose Save
3.2.13 Tax Exemptions
3.2.13.1 Define Other Allowance or Reimbursement Subtype for Exemption
Use
In this activity, you must create a subtype for the Exemptions Infotype (0582), in case
your company wants to give tax exemption to the employees on any allowance or
reimbursement.
Procedure
IMG menu Payroll  Payroll: India  Tax Exemption  Define Other
Allowance or Reimbursement Subtype for Exemption
2. Choose New Entries and maintain the subtype and the name
3. Choose Save
3.2.14 Recovery of Rounded Off Amounts
Use
This section enables you to make the settings necessary for recovering amounts rounded off during the
payroll run.
Any employee's net salary is rounded off to the nearest suitable denomination, so that the payment to
employees are made easily by avoiding fractions.
This is non-statutory company practice where the salary is normally rounded off to nearest rupee or
amount suitable to the employer. The rounded off amount is recovered in the next month's salary or at
the end of the calendar year or fiscal year. The periodicity for the recovery is at the discretion of the
employer.
3.2.14.1 Maintain Details for Recovery of Rounded Off Amounts
Use
In this activity, you must maintain the details required for:
 Rounding off of the Net Pay Wage Type (/560) to a suitable denomination
 Recovery of the rounded off amounts from Net Pay Wage Type (/560)
Procedure
IMG menu Payroll  Payroll: India  Recovery of Rounded Off Amounts
 Maintain Details for Recovery of Rounded Off Amounts
2. Choose New Entries and maintain all. grp, Round To, Option, Rnd. Off, Curr.
From, To
3. Choose Save
3.2.15 Off-Cycle Activities
Use
Off-cycle activities include the following functions:
 Off-cycle payroll runs
 Check and transfer replacement
 Reversal of payroll results
 Manual assignment of check number
In this section, you make the settings necessary for various types of off-cycle payroll and specify the
relevant off-cycle reasons. You also define all the parameters that are necessary to print checks.
In addition, you must maintain the role for off-cycle activities under the step Maintain
Authorizations.
3.2.15.1 Check entry permissibility for Infotype (0267)
Use
In this activity, you check those wage types you want to be paid through the One-Time
Payments Off-Cycle Infotype (0267) for an off-cycle payroll run.
Procedure
IMG menu Payroll  Payroll: India  Off-Cycle Activities Check entry
permissibility for Infotype (0267)
2. Choose New Entries and maintain WT, Start Date, End date. Choose radio button
for once or several times.
3. Choose Save
3.2.15.2 Set Up Off-Cycle Reasons
Use
In this step, you define the off-cycle payroll reasons that are to be available to the
administrator for running off-cycle payroll.
Examples of off-cycle reasons include:
 Additional payments
 Christmas bonus
 Payment in advance (Leave)
You assign a category for off-cycle reason to each off-cycle reason. The system uses the
category to assign both a type of off-cycle reason and a payroll type to the off-cycle
reason. Category, type of off-cycle reason and payroll type are technical distinctions
that determine whether the procedure in question is regular payroll, a bonus payment,
an absence payment, or a payment in advance.
Similar off-cycle reasons can belong to the same category. This ensures that payroll
runs with similar off-cycle reasons are treated identically by the system.
For more information, refer to the SAP Library under Off-Cycle-Activities -> The
Process of Off-Cycle Payroll -> Off-Cycle Payroll -> Types and Categories of Off-
Cycle Payroll
Procedure
IMG menu Payroll  Payroll: India  Off-Cycle Activities Set Up Off-
Cycle Reasons
2. Choose New Entries and maintain OC Reason, Description, OC cat.
3. Choose Save
3.2.16 Company Loans
Use
In this section, you make the settings required to enter data on employer loans and to
enable you to process loans.
3.2.16.1 Master Data
Use
In this step, you make the settings for master data editing in the Loans infotype (0045)
3.2.16.1.1 Maintain Loan Types
Use
In this step, you define the loan types that exist within your enterprise. Loan types are
subtypes of the Loans infotype (0045).
Procedure
IMG menu Payroll  Payroll: India Company Loans  Master Data 
Maintain Loan Types
2. Copy from an existing Loan entry
3. Change view Country assignment. Press Enter.
Make it permissible for Country Grouping ‚40‘ if it doesnt already exist.

4. Choose the Loan subtype and choose Technical attributes
Choose Instalment loan.

5. Choose Conditions.
3.2.16.1.2 Maintain Loans Grouping
Use
You can define the Loan Groupings in this feature. You can use the following factors
in determining the Loan Grouping:
 Loan Type
 Pay Scale Groupings for Allowances
 Personnel Number
Procedure
Maintain Loans Grouping
2. Maintain the feature 40LGR as per the loan types for each allowance grouping as
SPNC.
3.2.16.1.3 Maintain Salary Components
Use
In this feature, you must define the different salary components (wage types) for a Loan Grouping.
The sum of these wage types will define the salary. This salary is then multiplied by the salary factor,
maintained in the IMG through Maintain Loans Eligibility Checks and Limits, to arrive at one of
the three components to determine the loan approval amount.
These wage types must be present in the Basic Pay Info type (0008).
Procedure
Maintain Salary Components
2. Maintain the feature 40LSL for the grouping SPNC as 1000 (Basic WT)
3.2.16.1.4 Maintain Loans Eligibility Checks and Limits
Use
In this step, you must maintain the characteristics for a Loan Grouping defined by you in the 40LGR
feature. These characteristics will be taken into consideration when you are disbursing loans for an
employee through Loans Infotype (0045).
You can create a number of records with different characteristics for different periods of time.
Procedure
Maintain Loans Eligibility Checks and Limits
2. Choose G001 and choose details
Maintain the required entries.
3. Choose Save
3.2.16.2 Calculation
Use
In this section, you set up accounting for loans issued by an employer to an employee.
3.2.16.2.1 Adjust Value Date
Use
In this step, you adapt the value date for payroll to the payment date for your payroll
areas.
Procedure
IMG menu Payroll  Payroll: India Company Loans  Calculation 
Adjust Value Date
2. Maintain entries for payroll areas relevant to GIL
3. Choose Save
3.3 Posting of Payroll Results
Use
In this section, you make the settings required for evaluating payroll results for Posting
to Accounting. Posting to accounting is an interface between the Human Resources
and Accounting systems. If Human Resources and Accounting are implemented in
separate systems, we recommend that you carry out certain activities in the HR system
and others in the Accounting system.
If Human Resources and Accounting are set up in the same system, you can ignore the
activities relating to the division of activities between HR and Accounting systems. In
this case, the activities from both sections are to be carried out in the same system as in
the case of GIL.
3.3.1 Activities in the HR System
Use
In the steps Employee Groupings and Symbolic Accounts and Maintain Wage Types, you make the
settings for account determination that are necessary for Human Resources.
In the steps Maintain Posting Date for Payroll Periods and Create Posting Variants, you make settings
for running the report Create Posting Run (RPCIPE00).In this step, you specify when wage types can be
entered in this info-type.
3.3.1.1 Employee Grouping and Symbolic Accounts
Use
Human Resources wage types are not assigned directly to accounts in Accounting (FI).
In the first instance, they are assigned to symbolic accounts. Account determination for
Posting to Accounting is a two-step procedure. For this reason, changes to the chart of
accounts do not affect wage type coding:
1. In the Payroll component, a symbolic account is assigned to a wage type. Symbolic
accounts group wage types that are to be treated similarly for the purposes of posting.
2. The symbolic account is assigned to an account in Accounting (G/L account,
customer account, vendor account).
The employee grouping for account determination is used in assigning symbolic
accounts to accounts in Accounting. This makes it possible, for example, for specific
expenses in Payroll to be posted to a single symbolic account, but distributed to various
accounts in Accounting.
This process is determined in line with the employee's characteristics as defined in the
Workplace Basic Pay (WPBP) table.
3.3.1.1.1 Define Symbolic Accounts
Use
In this step, you create the symbolic accounts that you require for posting to Accounting.
A symbolic account has the following characteristics:
o A four-character alphanumeric code
o A descriptive text
o An account assignment type (AA type). This defines the type of posting (posting to expense account,
posting to payables account and so on) that applies to the wage types that are posted to the symbolic
account.
The following table shows what kind of account and what transaction is linked to an account
determination type and what additional information (for example, for cost assignment) is also included
in the posting transaction.
Procedure
Payroll  Payroll India Reporting for Posting Payroll Results to
Accounting  Activities in HR system Employee Grouping and
Symbolic Accounts Employee Grouping Account determination:
Define values
you create the symbolic accounts that you require for posting to
Accounting.
A symbolic account has the following characteristics:
A four-character alphanumberic code
A descriptive text
An account assignment type (AA type). This defines the type of posting
(posting to expense account, posting to payables account, and so on) that
applies to the wage types that are posted to the symbolic account.
An employee grouping for account determination (EG) indicator
The following table shows what kind of account and what transaction is
linked to an account determination type and what additional information (for
example, for cost assignment) is also included in the posting transaction.
AA
Meaning Transaction Additional fields
type
C posting to expense account HRC cost assignment
CN posting to expense account HRC cost assignment
without quantity without quantity
R posting to expense account HRC
if accounting is installed in
R/2 System.
F posting to bal. sheet account HRF
FL posting to bal.sheet account HRF
for checking balance
in retroactive accounting
(recalculation difference
account)
FO posting to bal. sheet account HRF
(original periods for
wage types whose amount
cannot change
retroactively)
Q posting to bal. sheet account HRF personnel number
with personnel number
D posting to personal HRD acc. determination
with personnel
customer accounts
number
DF posting to fixed customer HRD direct assignment
of customer account
L posting to customer HRD acc. determination
with personnel
account(for specific loan)
number
loan type,
sequential number
posting to personal vendor acc. determination
K HRK
accounts with
personnel number
KF posting to fixed vendor HRK direct assignment
acc. of vendor account
Note the following with regard to account assignment types:
In the standard system, no quantities are transferred from wage types in the
payroll result to the payroll documents and the resulting accounting
documents, although information on quantities is available on the report log
for report RPCIPE00 (or RPCIPX00). It is also possible to modify the system
to access this information. The account assignment type CN is only useful if
you have made this modification and if, in certain instances, you want to
suppress the transfer of quantity information.
The account assignment types FL und FO are only of use if there are cross-
company code transactions. For more information on customizing cross-
company code transactions, refer to Posting to Company Code Clearing
Accounts.
We recommend that for symbolic accounts with account type FO, you
determine the account in Accounting independent of the Employee
grouping for account determination (Feature PPMOD). For this reason, only
one G/L account is provided for the payment of wages and salaries as
standard. If you determine this G/L account depending on the employee
grouping for the account determination, this can lead to inconsistencies when
posting the retroactive accounting results. This is due to the fact that when
posting retroactive accounting results for wage types that cannot change
retroactively, a technical posting takes place (for example, for the wage type
Payments (/559)). Since this technical posting usually takes place in the same
account in Accounting, it balances to zero and does not appear in the posting
document. However, if you determine this account independently of the
employee grouping for account determination, and an employee falls in a
different employee grouping due to a retroactive change in the HR master data
or feature PPMOD, the technical posting cannot balance to zero because two
accounts are affected in Accounting. This is why you have to make changes
manually in this case.
Basic Salary / DA – Officers
Payroll - Payroll India –> Reporting for Posting Payroll Results to
Accounting  Activities in HR system  Maintaining Wage Types
you specify which wage types are to be posted, how often they are to be posted within
the evaluation of one payroll result, and the symbolic account to be used for each
posting.
You can also maintain the following posting characteristics:
1. Plus/minus sign
The system stores wage types with a plus (+) or minus (-) sign in the payroll result.
How specific wage types are stored depends on how the system processes them during
the payroll run. In the standard system, the sign is usually set correctly for secondary
wage types. If you enter a plus sign (+) in the V column, positive amounts are posted as
debits, and negative amounts are posted as credits. If you enter a minus sign (-) in the
V column, positive amounts are posted as credits and negative amounts are posted as
debits.
2. Processing a wage type
You can use the processing type to assign posting characteristics of a wage type to the
following business processes:
Posting payroll results
Posting month end accruals
Supplying personnel cost data to Cost Planning
3. Symbolic account
4. Account assignment type
The account assignment type determines which account type is to be used for posting.
It is defined by the symbolic account, and can only be displayed in this column.
5. Indicator specifying whether the cost assignment for infotypes Recurring
payments/deductions (0014), Additional payments (0015), and Employee
remuneration information (2010) should be ignored (table C1).
You only use this indicator if you want the system to ignore a different cost assignment
when posting the wage type.
Payroll - Payroll India –> Reporting for Posting Payroll Results to
Accounting  Activities in AC system  Assigning Accounts
you assign accounts in Accounting to symbolic accounts in Human Resources.
According to this assignment, during posting to Accounting, the accounts in Financial
Accounting are assigned to line items for which symbolic accounting has been
performed.
With the exception of the technical accounts, the activities for the various account
types contain an identical step, that is, you must define the rules for the
corresponding posting transaction. Note the following information for carrying out this
step:
The Debit/Credit indicator must only be set if you want to post debits and credits to
different accounts. It is not advisable to set this indicator, since in posting to
Accounting, only summarized documents are posted.
If you set the EE group indicator, a further column EE group appears in account
assignment. You must only set this indicator if you want to post to any symbolic
account for a specific employee grouping. You make the relevant settings for posting to
symbolic accounts in the step Define Symbolic Accounts.
 Assign Balance Sheet Accounts

Enter GIL as Chart of Accounts
you assign balance sheet
accounts to the symbolic
accounts with the following
account assignment types.
Postings to balance sheet
accounts without personnel
numbers (account
assignment type F)
accounts with personnel
numbers (account
assignment type Q)
accounts to check the balance
in retroactive accounting
(account assignment type FL)
accounts in the original
periods only, if the wage
types do not change
retroactively during
retroactive accounting
(account assignment type
FO)
Balance sheet accounts are
usually assigned irrespective
of the employee grouping for
account determination.
 Assign Expense Accounts

you assign expense accounts to
the symbolic accounts used for
expense postings (account
assignment type C) or for
expense postings that do not
consider the number field in the
payroll results (account
assignment type CN).
Expense accounts are often
assigned depending on the
employee grouping for account
determination.
.
RESEARCH METHODOLOGY
Background of the study
The seas of ERP (Enterprise Resource Planning) are vast, and navigating the rocky
waters of the current market is no simple task. The many midmarket ERP vendors all want
company’s business. SAP is selected to provide a flexible and reliable HCM solution for
managing and improving the range of transactional, tactical, and strategic processes associated
with human resources. Through the implementation the organization aims at enabling HR
systems and processes to add value to the overall business strategy and prepare for the
challenges of a fast-growing and expanding organization.
The challenges faced by Graphite India Ltd before deploying SAP solutions included an
archaic system with lack of real time benefits and in need of consistency and integration across
the organization. Following the SAP Implementation, The GIL has derived business benefits
like standardized and uniform HR system and processes, improved planning & decision making
through real-time reporting mechanisms, increased efficiency through process automation and
enhanced employee engagement levels through automation and interactive self service
convenience
Statement of the problem
The research problem selected is entitled as “Effectiveness of SAP HR in Payroll in

WIPRO Technologies , Bangalore”.
Need and importance of study
o This study is undertaken to find out the effectiveness of SAP HR in Payroll.
o This study will help the organisation to configure their Payroll in SAP
NATURE OF RESEARCH:
Exploratory Research
Research Technique:
 Direct Interviews
 Testing of Hypothesis
 Sampling criteria
Tools Used:
 Questionnaire
 SAP ECC 6.0 version
Hypothesis:
o There exists no difference in the perception of effectiveness of SAP HR in Payroll
o There exists difference in the in the perception of effectiveness of SAP HR in

Payroll
Primary Objective
o To study the effectiveness of SAP HR in Payroll by the client
Secondary Objectives
o To study the end to end configuration aspects of SAP HR Payroll
o To explore aspects and issues associated with Payroll operations in the following
areas:
 Demographics
 Systems & Technology
 Operations
 Compliance & Taxation
 Governance
 Training & Continuous Improvement
.
Scope
This study is undertaken to find out the effectiveness of SAP HR in Payroll in WIPRO
Technologies, Bangalore.
Limitation
o The sample size was limited
o It includes the officers of the Zonal Office only and not the organisation as a whole.
o Respondents did not answer a few questions.
o Opinion of the respondents may be raised.
Sources of Data:
Primary Data:
Primary data has been collected through administering the questionnaires personally
to SAP professionals of WIPRO. The response was analysed and evaluated to extract
the required information.
Secondary Data:
Secondary data has been collected from third party consulting Delloite and also
various reports collected from them.
Information was also collected from websites, brochures, bank journals, magazines
etc.
Sample size:
The sample size considered for the research is 100
Sampling technique:
The sampling technique used is simple random sampling.
Research Instrument:
The instruments used for research are mainly questionnaires and interviews.
A set of questionnaires was presented to respondents. Because of its flexibility, it is by
far the most common instrument used to collect primary data. Questions were carefully
developed, tested and debugged before administering in a large scale.
The questions and their form, wording and sequence were carefully chosen.
Close ended questions were chosen specifying all possible answers
Under close-ended questions, the following types of questions were asked in the
questionnaire.
Questionnaire:
Section 1 — Demographics
1. What is your company's primary industry?
a. Consumer & Industrial Products

b. Energy & Resources
c. Financial Services
d. Life Sciences & Healthcare
e. Manufacturing
f. Retail
g. State Government and Public Sector
h. Technology, Media & Telecommunications
2.How many active employees are on your payroll?
a. Less than 10,000

b. 10,001 - 25,000
c. 25,001 - 100,000
d. More than 100,000
3.Where does payroll report in your project ?
a. Finance
b. HR
c. Shared Services
d. Others
4. Is the payroll function centralized or decentralized ?

a. Centralized
b. Decentralized
c. Hybrid
d. Other
5. Are there any plans to develop a global payroll strategy?

a. Yes
b. No, no plans
c. No, one already exists
d. No, don't need one
e. Not sure
Section 2 — Systems & Technology
1. Which HR/Payroll ERP systems do you have?
a. PeopleSoft
b. SAP
c. Lawson
d. JD Edwards
e. Oracle
f. Other
2. What payroll employee self-service transactions do you offer online?
a. View Online Pay Statements

b. Update Banking Details
c. View Online Annual Tax Documents
d. Update Employee Tax Withholdings Information
e. Elect / Update Voluntary Deductions
f. Other
g. No Online Payroll Self-Service is Offered
Section 3 — Operations
1. Which pay period frequencies does your payroll process?
2. How many different pay frequencies do you process?
3. Which employee payment methods do you offer?

a. Direct Deposit
b. Pay Card
c. Cheque
4. How many off-cycle payments do you process per month?
5. Number of companies processing off-cycle payments based on company size and

number of off-cycle payments processed per month
6. What payroll services do you outsource to an external vendor?

7. Which remittances are transmitted via EDI (Electronic Data Interchange), ACH
(Automated Clearing House), or other means of electronic transmission?
Section 4 — Compliance & Taxation
1. What would motivate you to track traveling employees for wage/tax sourcing?
2. If you have globally mobile employees/expatriates, what do you consider as your

top payroll-related challenges or risks?
3. Which of the following are in place to address global mobility/expatriate payroll

processing challenges and risks?
Section 5 — Payroll Governance
1. What do your payroll governance policies cover?
2. Are service level agreements established with customers and 3rd party services
providers?
3. How are service level agreements monitored and tracked?
4. Which key performance indicators (KPIs) does payroll operations regularly track and
monitor?
Section 6 — Training & Continuous Improvement
1. Are there any learning, training, or certification requirements that your payroll
resources have to complete on an ongoing basis?
2. On average, approximately how many hours of training per year does each person
on the payroll team receive?
3. What is currently your biggest payroll service delivery and processing challenge?
ANALYSIS/FINDINGS
Section 1 — Demographics
1. What is your company's primary industry ?

Consumer & Industrial Products Energy & Resources
Financial Services Life Sciences & Healthcare
Manufacturing Retail
State Government and Public Sector Technology, Media & Telecommunications
9%
15% 8%
16%
13%
14%
18%
7%
2.How many active employees are on your
payroll?
Less than 10,000 10,001 - 25,000 25,001 - 100,000 More than 100,000
8%
23%
52%
17%
3.Where does payroll report in your project ?

Finance HR Shared Services Others
2%
18% 20%
60%
4.Is the payroll function centralized or
decentralized ?
Centralized Decentralized Hybrid Other
4%
23%
60%
13%
5. Are there any plans to develop a global payroll

strategy?
Yes No, no plans No, one already exists No, don't need one Not sure
8%
19% 40%
12%
21%
Section 2 — Systems & Technology
1. Which HR/Payroll ERP systems do you

have?
SAP PeopleSoft JD Edwards Oracle Lawson Others
1%
7%
12%
10%
52%
18%
2. What payroll employee self-service

transactions do you offer online?
View Online Pay Statements
14% Update Banking Details

25%
24% View Online Annual Tax

11% Documents
Update Employee Tax
10% Withholdings Information
16%
Elect / Update Voluntary
Deductions
No Online Payroll Self-Service is
Offered
Section 3 — Operations
1. Which pay period frequencies does your

payroll process?
Monthly Bi-Monthly Weekly Bi-Weekly Daily Quarterly
4%
7%
14%
6% 56%
13%
2. How many different pay frequencies do

you process?
1 2 3 4 5
10%
7% 31%
21%
31%
3. Which employee payment methods do you
offer?
Direct Deposit Pay Card Cheque
2%
8%
90%
4 5
6.
7
.
Section 4 — Compliance & Taxation
1
.
2
3
Section 5 — Payroll Governance
1
.
2 3
. .
4
.
Section 6 — Training & Continuous Improvement
1 2
3
.
RESULTS/ CONCLUSION :
Demographics
• Payroll reports to Finance in 20% of organizations, to HR in 60%, and to shared services in
18%.
• 60% of respondents have a centralized payroll function.
• 40% of respondents already have a global payroll strategy or plans to create one.
Systems
• 65% of respondents have an integrated ERP system, with SAP being the most common at
52%.
• 92% of respondents are using some form of online self-service payroll functionality. The
following capabilities are commonly used: View Pay Statements (25%), Update Bank Details
(11%), View Annual Tax Documents (10%), and Update Tax Withholding Information
(16%).
Operations
• Monthly pay frequency is used by 56% of respondents.
• 69% of respondents process more than one pay frequency.
• The following payroll payment options are offered by respondents to employees:
- 90% offer direct deposit and on average 89% of employees select this option.
- 8% offer live checks and on average 10% of employees select this option.
- 2% offer pay cards and on average 1% of employees select this option.
• Electronic remittance is frequently used for direct deposit, taxes, defined contribution &
defined benefit contributions, FSA deductions, and involuntary deductions.
• 79% of respondents reported using an outsource vendor for some aspects of payroll
administration –commonly used services include W-2 printing/distribution, tax
reporting/filing, and check printing.
Compliance & Taxation
• 81% of respondents have employees that travel to other states.
- 15% of these indicated that they currently track and source wages based on work location.
- 17% indicated that tracking these employees for taxation purposes is too difficult a task.
- Respondents were evenly motivated by the following to track employees: Software to assist
with the task, state enforcement of regulations, and new laws that made state regulations
consistent.
• 69% of the respondents have global employees/expatriates.
• The top 3 challenges reported related to expatriate payroll processing are:
- Year-end processing (52%)
- Determining tax withholding obligations (44%)
- Reporting of taxable compensation (40%)
• The top 3 reported items to reduce expatriate challenges and risks:
- Outsourcing tax reporting to a vendor (46%)
- Global compensation collection and reporting procedures (27%)
- Outsourcing local payroll processing to a vendor (25%)
Payroll Governance
• 94% of respondents have payroll governance policies in place.
• 75% of respondents maintain service level agreements (SLAs) with customers and 3rd party
providers – these are commonly tracked via surveys, the case management system, and call
center reports.
Training & Continuous Improvement
• Payroll accuracy, timeliness, and completeness was reported by 36% of the respondents as the
biggest payroll service delivery challenge.
• Only 27% of respondents have training or certification requirements in place for the payroll
staff.
• The payroll staff for approximately 60% of respondents receives an average of 1–20 hours of
training per year. Only 25% receive over 20 hours. 14% receive 0 hours.
SAP vs Peoplesoft
PeopleSoft to SAP. Two interesting items I think are worth mentioning are:
1) SAP data is much cleaner than in PeopleSoft. The reason for this is that SAP has tons
of check tables and other logic it uses to make sure the data is clean when it is entered
into the system.
2) One interesting issue that comes up whenever we are running parallel payroll is that
the results in SAP are more accurate than in PeopleSoft. Often times whenever we
would run into a difference between the two systems we would find that PS processing
would be a few cents off but the SAP amount was actually the correct one.
End user screens in PS definitely look "nicer" but what is the use if the system lets you
key in whatever you want.
SAP AND CLOUD PAYROLL :
SAP’s global payroll solution is now available as a hosted option that comes integrated
with Employee Central. For organizations that wish to manage payroll in-house via a
cloud-based solution, SAP Cloud Payroll offers all the same features and benefits as
SAP’s on premises-based payroll solution, delivered with the security, scale, and
flexibility of the SuccessFactors cloud.
SAP Cloud Payroll offers you:
 A proven solution – Serving thousands of customers in more than 90 countries,

SAP’s payroll engine is the most widely used solution in the world.
 Hosted in the leading business software cloud – Serving more than 4,000
customers and 15 million users globally, the SuccessFactors cloud is the most secure
and scalable in the industry.
 Lower TCO – SAP Cloud Payroll enables customers to realize the cost advantages of a
cloud-based solution.
 Global reach – The first release of SAP Cloud Payroll will be available in 10
countries: USA, Germany, Canada, Brazil, Mexico, Netherlands, UK, Switzerland,
India, and Australia.
SAP Cloud Payroll is available as an option for SuccessFactors Employee Central

customers only.
For the entire ERP Payroll suite , it can be concluded that the future holds for a
dominant SAP HR. So, “SAP HR is the most effective compared with its
competitors in ERP Market”.
Glossary/ Terminology
Name Description
Client SAP Client is from organizational point of view is standalone system
object which means that: All Data of one client cannot be used from
another client (all data isolated within client);
Company Company code is the smallest organizational unit of Financial
Code Accounting for which a complete self-contained set of accounts can be
drawn up for purposes of external reporting.
Controlling Controlling area is an organizational unit within a company, used to
area represent a closed system for cost accounting purposes.
Business Business area is an organizational unit of financial accounting that
Area represents a separate area of operations or responsibilities within an
organization and to which value changes recorded in Financial
Accounting can be allocated.
Functional Functional Area is an organizational unit in Accounting that classifies
Area the expenses of an organization by functions.
Personnel Personnel area is an organizational unit representing an area in an
Area enterprise de according to personnel administration, time management,
and payroll accounting criteria.
Personnel Personnel sub-area is an organizational entity which represents a part
Sub Area of a personnel area characterized by personnel administration, time
management, and payroll criteria. Personnel Sub-area represents
further splitting of the Personnel Area, and serves similar purposes.
Legal Person Legal person is a body of persons, an enterprise, a partnership, or other
legal group that is recognized by law as the subject of rights and duties.
In the current project Legal Person coincides with Company Code and is
used for personnel administration statutory reporting purposes.
Cost Centre Cost centre is an element of Cost Accounting structure and denotes the
organizational unit within a controlling area that represents a defined
location of cost incurrence.
Employee The overall employee classification is performed using the notion of an
Group Employee Group. An Employee Group determines an employee’s
relation to the enterprise (depending on how his manpower is used).
Employee Employee subgroups are a subdivision of employee groups and
Subgroup represent more detailed classification of employee groups depending on
their status. Employee subgroups subdivide employee groups according
to their status, grade, etc.
Employment Employment status is another attribute that characterizes employee’s
status employment status (Active, Inactive, Withdrawn, Retiree, etc.)
Payroll Area Payroll area is an organizational unit containing all of the employees
for whom the payroll runs at the same time. Payroll area is used for
personnel grouping for payroll run purposes. It means that each payroll
run done for a specific payroll area will cover only those employees who
are assigned to this payroll area.
Personnel Personnel number is the only feature within a client which is unique to
Number an employee. A personnel number should be assigned prior to
Range maintaining an employee's master data and time data.
Organization Organizational key is a composite field consisting of different fields
al Key (such as personnel area/sub area, payroll area, or any arbitrary text –
location) can be used for structuring of authorization levels.
Info type Info type is a set of data grouped according to subject matter. It enables
the user to process employee data in an effective structure in accordance
with business requirements. The data structure of info types mirrors a
logical set of data records. Info types can be identified by their four-digit
keys, for example, the Addresses info type (0006).
Subtype Subtype is the category of information within an info type. Some info
types do not need to be divided into subtypes.
Info group Info group is a sequence of info types displayed by the system for
processing when an action is performed, for example, a personnel
action.
Personnel Personnel Action is a series of info types that are added, changed,
Action completely or partially deleted, or de. The series of info types edited
using actions is defined during configuration. Each personnel action
contains the info types that must be maintained to perform the task at
hand. The info types are retrieved in succession. This ensures that all of
the information required for each personnel action type is entered.
Personnel Personnel Number is an 8-digit identifier for an employee in SAP HCM.
Number It is assigned automatically by the system as soon employee record is
created. It is unique for an employee in terms of one legal entity.
Employees with more than one work contract with different legal
entities are assigned separate personnel numbers for each contract. All
these personnel numbers are connected by Reference Personnel
Number.
Reference Reference Personnel Number is used to assign several personnel
number numbers to one employee, if the employee has more than one different
employment relationships in the company. Reference Personnel
Number establishes links between all of an employee’s reference
personnel numbers and it is used in Personnel Administration for
copying information that is common to all personnel number records for
an employee who has several work contracts.
Time Time constraint is a determinant of whether a data record must be
constraint defined without time gaps, or whether overlaps or collisions are
permitted.
 Time constraint 1 identifies that once created the record should
exist without any time gaps and no overlapping of records is
possible.
 Time constraint 2 identifies that time gaps between records can
exist but no overlapping is possible.
 Time constraint 3 identifies that time gaps between records can
exist and overlapping of records is possible.
 Time constraint T – based on subtype or subtype table
Holiday Public holidays are usually stated in local labor legislation, e.g. Labor
Calendar Code. Holidays may be fixed, i.e. observed on a concrete day every year,
or shifting, i.e. observed on different dates; those are specified by
legislation every year
Work Schedule The Work Schedule defines working time models such as shifts, continuous working
times, or flexi-time for scheduling working time provisions for workforce or work
processes
Absence An Absence is a deviation of an employee’s work schedule (when employee is out of
workplace) which can be paid or unpaid.
Absence Quota Absence Quota is that which has got pre defined yearly entitlement. It can be carried
forward or en cashed upon organization decision
References & Bibliography:
 SAP HR India Payroll , By P K Agrawal, PHI India
 Payroll Basics, SAP AG, Germany
 http://www.successfactors.com/en_us/solutions/bizx-suite/employee-central/sap-cloud-
payroll.html
 http://scn.sap.com/thread/1368025
 http://help.sap.com/saphelp_erp2005vp/helpdata/en/dd/38a63a04227748e10000000a11402f/fr
ameset.htm
 http://www.insightcp.com/res_13.htm#top
 http://www.insightcp.com/res_19.htm
 http://www.sap-img.com/hr009.htm
 http://www.planetsap.com/hr_payroll_main_page.htm
 http://saphrexpert.blogspot.com/search/label/payroll
 http://www.abaphr.com/material/
 http://www.sapfunctional.com/HCM/HCMMainPage.htm
 http://sap.ittoolbox.com/groups/technical-functional/sap-hr/
 https://www.facebook.com/#!/groups/2471217079/
 http://scn.sap.com/community/erp/hcm/content?filterID=content~objecttype~objecttype[thread]
View publication stats

SAP HR - India Payroll

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

SAP HR - India Payroll

Caricato da

Copyright:

Formati disponibili

See discussions, stats, and author profiles for this publication at: https://www.researchgate.

Effectiveness of SAP HR in Payroll

Thesis · April 2013

Niladri Bihari Nayak

People Analytics View project

Tech-Fiction Series : Internet of Things (IoT) View project

The user has requested enhancement of the downloaded file.

“Niladri Bihari Nayak”

Under the guidance of

A PROJECT REPORT submitted in partial fulfillment of the requirement

of SIKKIM MANIPAL UNIVERSITY, INDIA

I would like to extend my appreciation to Mr. Manish Kothari, Director, BET

I am grateful to Prof. T.K. Vijaykumar, ISBR(Formerly BET College) for giving

I am extremely grateful to my Family, Friends, Colleagues and BET College staff

Name : Niladri Bihari Nayak

Certified that this project report titled “Effectiveness of SAP HR in Payroll” is

carried out the project work under my supervision.

This is to certify that the Project entitled

“Effectiveness of SAP HR in Payroll”

Submitted in partial fulfillment of the requirements for the degree of

“Niladri Bihari Nayak”

The project report of

“Niladri Bihari Nayak”

“Effectiveness of SAP HR in Payroll”

Is approved and is acceptable in quality and form

Internal Examiner External examiner

I hereby declare that the project report titled

“Effectiveness of SAP HR in Payroll”

Submitted in partial fulfillment of the requirements for the degree of Master

Place : Bangalore Signature of the Student

1.2.1.1.1 Personnel Area

A personnel subarea is an organizational unit that represents a specific area of the

 Defining of pay scale and wage type structure

 Defining planned working hours

 generating a selection criterion for evaluations

 generating a unit for the authorization check

1.2.1.1.4 Employee Subgroup

The following business subtasks are provided among other things:

 specification of processing in payroll accounting

 specification of validity of primary wage types

 specification of validity of work schedules

 specification of validity of pay scale groups

 specification of validity of time quota types

4. Access the activity using one of the following navigation

Ranges created for Human resources:

1.2.1.3.3 Family Data

In the section "Family", you configure the following areas:

1.2.1.3.4 Organizational Data

 It groups together personnel numbers that are to be processed on the same

 It determines the exact payroll period

1.2.1.3.5 Evaluation Basis

Transaction Code SPRO

Transaction Code SPRO

Define fields relevant for retroactive accounting

Assign info types to countries

Transaction Code SPRO

1.2.1.3.6.1.1.1 User Group Dependency on Menus and Info Groups

Transaction Code SPRO

1.2.1.3.6.1.2 Define Infogroups

Hire Action Type “GA”

Confirmation of Training Action Type “ GN”

1. Access the activity using one of the following navigation

1. Access the activity using one of the following navigation

'' '' At least amount or number/unit

'' '' At least amount or number/unit