Rudiments of Payroll Processing in SAP HRonlinepresent.org/proceedings/vol147_2017/13.pdf ·...

Rudiments of Payroll Processing in SAP HR

J. Anitha1 and J. Saritha2

1Associate Professor, IT,

Vignan Institute of Information Technology, Duvvada 2Sr. SAP HR Consultant, SAP – Payroll, ADP

Abstract. This paper explains the basic Concepts of Payroll and the terms &

terminologies used in Payroll processing. To Understand the Payroll concepts

in SAP HR and have a complete overview of the different features in the

Payroll module. SAP ERP is built on the Net Weaver technology.

SAPNetWeaver is used as a technology platform for integration and as an

application infrastructure with open connections to Microsoft .NET and IBM

WebSphere.The Payroll is based on an international payroll driver. This payroll

driver is modified for each country. The country-specific payroll drivers take

the statutory and administrative regulations of a country into account. Since the

payroll driver has a modular structure, you can use the Customizing functions

to quickly modify the payroll procedure to meet the particular requirements of

your enterprise. PAYROLL DRIVER is a Special report for Payroll. SAP has

developed country-specific payroll drivers, which are based on report

RPCALCx0. With country-specific reports the penultimate character in the

name refers to the country indicator (for example, D for Germany, F for

France).Report RPCALCx0 can calculate periodic payments and also off-cycle

payroll runs( Bonus calculations) . The country specific payroll drivers contain

the data. After the payroll run, you can transfer the payroll results to Financial

Accounting.

Keywords: Enterprise Resource Planning (ERP), Systems Application Product

(SAP), HR, Wagetype, Payroll processing, Payroll control record, Income Tax

computation, Posting to Accounts.

1 Introduction

In a broad sense, a wagetype simply holds a piece of data such as rate, number, and/or

amount. But more specifically, a wagetype has dozens of attributes that control how it

is manipulated and processed. In the end though, it ends up as an object in the payroll

results database that stores a rate, number, and/or amount.

The most typical use of a wagetype is to store the amounts of earnings, deductions

and taxes in an employee’s paycheck. A person’s base pay is stored in a wagetype, the

amount of their United Way deduction is stored in a wagetype, and their taxable

wages & taxes are stored in wagetypes. Wagetypes, as the primary data element for

employee paychecks, are also mapped to FI/CO accounts to record the debits and

credits resulting from the paycheck and reported on the W-2 and other tax forms.

Advanced Science and Technology Letters Vol.147 (SMART DSC-2017), pp.86-92

http://dx.doi.org/10.14257/astl.2017.147.13

ISSN: 2287-1233 ASTL Copyright © 2017 SERSC

Wagetypes can also be used to store statistical data such as the number of hours

worked in a pay period, the average weekly wages for the past six months, or the

amount of wages eligible for a profit sharing calculation. Wagetype attributes are

stored in several tables, but the central table is T512W. Much more time will be spent

on various aspects of T512W.

There are three categories of wagetypes model, technical, and user. Model

wagetypes are delivered by SAP for customers to use as guidelines for creating their

own wagetypes. They always start with a letter and SAP may add, delete or update

them in system upgrades or HRSPs. Technical wagetypes always start with the/

symbol, and are delivered by SAP. They are intended for very specific standard

processing in payroll, and while you can modify them, SAP may also update them

during upgrades or HRSPs. So if you ever (I mean EVER) change a technical

wagetype, check it after each upgrade or HRSP to make sure it still has the attributes

you want. And never delete a technical wagetype. User wagetypes always start with a

number and these are wagetypes that SAP does not change during upgrades & HRSPs

SAP rarely changes them in upgrades and HRSPs. User wagetypes are for all the

company-specific payroll payments and deductions.

Table 1. Details of the employee

Pay

Scale

Area

Pay

Scale

Type

ESG

Gpg.

For CAP

Pay

Scale

Group

ALGRP

Key

ALGRP

Definition

01 01 3 01 AL01 VtzWorkmen

01 01 3 02 AL02 Vtz Casual

01 01 3 03 AL03 Vtz Contract

01 01 3 10 AL10 Vtz M6_ M8

02 01 3 06 AL06 Vtz M1-M5

02 01 3 07 AL07 Hwr SSW

02 01 3 08 AL08 Hwr SW1

02 01 3 09 AL09 Hwr SW2

99 01 3 04 AL04 Hwr HSW

99 01 3 05 AL05 Workman

99 02 3 11 AL11 M1-M8

99 02 3 12 AL12 Trainee

99 01 3 13 AL13 Vtz Temporary

staff

2 Payroll Areas

Payroll areas are used to group together employees for whom payroll is performed at

the same time, and also to set the dates for the payroll period. Employees from

different employee subgroups can belong to the same payroll area.

Advanced Science and Technology Letters Vol.147 (SMART DSC-2017)

Copyright © 2017 SERSC 87

Table 2. Details of the employee salary

Payroll Area Description

01 VignanVtz-Workmen

02 VignanVtz Staff

03 Vignan Senior Mgt

04 VignanHwr Workmen

05 VignanHwr Staff

06 M1 to M6

07 Others

3 Payroll Period

The time interval for which the payroll is regularly performed. In the abstract sense

the payroll period. It refers to the interval during which payroll is regularly

performed. For example, weekly or monthly payroll periods. In the concrete sense the

payroll period describes a specific period with start and end dates. For example, the

(monthly) payroll period from 01 through 31.

4 SAP Payroll Process

During payroll run, master data and time data changes that affect the payroll past

and payroll present are not permitted.

The payroll program reads the master data and time data infotypes, which means

that changes effected during the payroll run could jeopardize the accuracy of the

payroll results.

It also means that payroll should not be run during master data maintenance. This

is controlled by Payroll Control Record.


88 Copyright © 2017 SERSC

Fig. 1. Payroll Process

5 Payroll Simulation

Transaction – ZHRPAYROLL [with Test Run (no update) option selected]

1. Simulating a payroll run enables users to display and print remuneration

statements

2. Master Data and Time Data are not locked

3. Payroll periods are not counted in payroll control record

4. The results of a simulated payroll run are not written to the database. Instead,

5. they are displayed in the payroll log

6. A Simulation Payroll Run (without Display Log and Payslip options) is

recommended.



Fig. 2. SAP HR Service Package

6 Release for Correction

If errors are identified during ‘Check Payroll Results’, the Payroll Control Record

should be ‘Released for Correction’

When the status of Payroll Control Record is ‘Released for Correction’ users can

carry out employee master data changes in the payroll past and present

Once master data corrections are completed, Payroll Area should be ‘Released

for Payroll’

Every time user goes through the cycle of ‘Released for Correction – Released

for Payroll’, the Run count gets incremented.

It is recommended that a Simulation Payroll with Payslip is option is run (for

employees for whom corrections were carried out) prior to Release for Payroll.

This is to optimize on no. of Payroll Runs.

6.1 Edit Posting Run

Transaction – PCP0

After creating the posting run, you can check whether the payroll results for all

employees have been correctly evaluated.

Display the list of posting runs

Check the required posting runs

Status: If the posting run has a status other than "Documents Created", an error has

occurred when creating the posting runs.

History: Choose 'Display History’

Attributes; Display attributes of a posting run



6.2 Check Posting Documents

There is no need to include page numbers. If your paper title is too long to serve as a

running head, it will be shortened. Your suggestion as to how to shorten it would be

most welcome.

6.3 Full and Final Statement

Full and Final Settlement is to be donethrough Regular Payroll

In case of mid month separation, payroll user can run full and final

settlement workbench

Subsequently, HR user can run theSeparation Action

Subsequently, payroll user will have torecord a recovery of the same Net

Payamount through Salary Advance wagetype in infotype 0015

When the monthly regular payroll run isdone subsequently, the Net Pay for

theseparated employee will be zero

Also payroll accounting for full and finalsettlement will betaken care at the

time ofregular payroll.

6.4 MIS Reports

3 Conclusion

This paper clarifies the Payroll processing and HR solutions available in SAP(System

Application Product) – ERP (enterprise Resource Planning ), to assist internal and

external needs of an organization.Payroll is country specific as it must be adapted to

the laws and regulations of each particular country. Due to this country dependency,

SAP has created a wage type catalog per country, as well as a country specific schema

within the standard solution. SAP offers global Payroll solution and this global

solution can be used for countries or as an example of re-usable development that can

be adapted for those countries where a standard solution does not exist. The Payroll

End user should now have the capacity to acknowledge and understand the Payroll

processing and its requirements, payslip generation, postings to financial accounting,



reports and other Payroll validations. The end user/client ought to likewise have the

capacity to portray reporting and analysis solutions available in SAP ERP to support

various internal and external reporting needs of an organization.

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