SAP HCM - Payroll Administration

Wage:
Wage is an instrument of payment or deduction in SAP payroll.
For e.g. wages such as Basic, HRA, Conveyance etc. are used to make payment to the
employee whereas Advance Recovery and Notice Pay Recovery are used to recover
wages from employees salary.
Model Wage types:
These wage types form the basis for creating customer wage type (e.g. BS01-Basic,
DA01-DA, HR01-HRA etc.). In other words customer wage types are created by
copying model wage types. Some of the commonly used model wage types are as
below:
Earning:
MB10 - Basic
MD20 - Variable Dearness Allowance
Allowance
M260 - Children Education Allow.

MD10 - Fixed Dearness Allowance

M230
House
Rent
MN01 - Notice Pay (Positive)

Deduction:
MDD0 - Deduction with Advance
MLIC - LIC Premium
Allowance
MHLP - Housing Loan Principal

M500 - Other Deduction Non-Stat.

MD20 - Variable Dearness
MN02 - Notice Pay (Negative)

Technical Wage types:

These wage types are created or formed during the processing of payroll.
Earning:
/124 - Monthly Regular Income

/125 - Monthly Irregular Income

/410 - Annual Regular Income

/411 - Annual Irregular Income

/416 -Gross Salary

/560 - Net Pay

Deduction:
/3E1 - Employee ESI Contribution

/3E2

Employer

ESI

Contribution
/3F1 - Employee PF Contribution

/3F2

/3F3 - Employer PF Contribution

Employee

/3F4

VPF

Contribution

Employer

Pension

Contribution
/3P1 - Professional Tax Deduction
Contribution

/3W2 - Employer LWF Contribution

/3W1

Employee

LWF

/460 - Income Tax

Wage Type Characteristics (V_T511):

SAP HCM - Payroll Administration

Wage Type Characteristics determine how wage type would be processed during payroll
run.
Start & End Date:
This field describes the validity period of the characteristic of wage types.
Amount:
Field Deduction WT is active if the wage type is Negative i.e. Deduction in nature.
Minimum number Field stores minimum value of the wage type.
Maximum number Field stores maximum value of the wage type.
Field Add to total is active if the wage type is Positive i.e. Addition in nature.
Number/Unit:
Time unit/meas. Field stores units viz. Hours, Minutes, Days, Month, Years etc.
Minimum number Field stores minimum value of the unit opted above.
Maximum number Field stores maximum value of the unit opted above.
Input Combination:
This controls the entry of data in the wage type i.e. whether an amount / number /
both is to be entered in the wage type.
Indirect Valuation:
Field Indirect eval. module and Module variant combine together to reflect if
Wage type is a fixed amount.
Wage type is certain percentage of other wage type.
Wage type is certain percentage of other wage type with limit.
Wage type is a combination of above factors.
Indirect Evaluation (INVAL):
Indirect Evaluation is a method to calculate the eligible amounts for some of the wage
types. Four module variants of INVAL are:
A - Calculates value of wage type as fixed amount. E.g. Basic is 1000
B - Calculates value as percentage of base wage type. E.g. HRA is 30% of Basic
C - Calculates value as percentage of base wage type subject to maximum limit. E.g.
HRA is 30% of Basic and not exceeding 290.
D - Calculates value as combination of above 3 variants.

Processing, Cumulation & Evaluation Class (Table V_512W_D):

Processing Class:
Processing Class determines how the wage type would be processed during payroll run.
Each processing class has number of different options that could be considered during
configuration.
E.g.
A particular payment (Wage Type) is to be reduced depending on an employee's
actual working time. In this case processing class 10 Mark Wage Types for Monthly
Factoring would be set to 1. On doing this the payment (Wage Type) would
automatically be pro-rated.
Alternatively, if the payment is to be made for the full amount irrespective of the
amount of time the employee has worked, then processing class 10, would be set to 0
no reduction.
SAP has provided standard processing class ranging between 1-89. Custom
processing classes range between 90-99.

SAP HCM - Payroll Administration

E.g. of processing classes:

1 - Valuation bases of wage type
of Time wage type
6 - Transfer of old payroll result
20 - RT Storage & Cumulation
77 - 1-day Sal. Deduction

3 - Cumulation & storage

10 - Monthly Factoring
72 - Prorate for ESI, P. Tax

Cumulation Class:
Cumulation Classes are used during payroll processing. cumulates the wage type and
stores under respective technical wage type.
E.g. of Cumulation classes:
1-Gross Amt.
assignment
10-Net Payment & Deduction
12-ESI Basis
18-PTax Basis

2-Print

on

form

w/o

11-EPF Basis
16-Gratuity Basis

Note : The technical wage type is always a value of 100 more than the
cumulation class.
The cumulation class 1 (total gross) gets processed during payroll as /101.
The cumulation class 11 (pensionable pay) gets processed during payroll as /
111.

Evaluation class:
Evaluation Class helps in controlling the payroll processing and finally displaying the
payroll result.
E.g. of evaluation classes:
2-Print on form w/o assignment

Mid-Year Go-Live:
Go Live happening other than in the month of April, is known as Mid-year Go-Live
Using the Mid Year Go Live functionality, final payroll results data {(Earning &
Deductions (statutory & non-statutory)} are uploaded.
Programme HINUULK0
Table - T558B and T558C
Schema - INLK

Regular Payroll:
Regular Payroll run is processed for a group of employees on monthly basis.
Payroll data to be processed during regular payroll is maintained in various infotypes
viz. 0008-Basic Pay, 0014-Recruring payment & Deductions, 0015-Additiional Payments,
0587-PF, 0588-ESI,PTax,LWF etc.
Transaction Code for processing regular payroll is PC00_M40_CALC.
Transaction Code for viewing the processed payroll result is PC00_M40_CEDT.

Off-Cycle Payroll:
Off-Cycle Payroll run is carried out in addition to the Regular Payroll Run for any
specific day and for any individual employee. This payroll is used for following
purposes:
Paying advance to an employee.
Giving bonus to workers.

SAP HCM - Payroll Administration

Payroll data to be processed is maintained in infotype 0267 - Additional Off-Cycle

Payments.
Transaction Code for processing off-cycle payroll is PUOC_40.

Pay Scale Structure:

Pay Scale Type, Pay Scale Area, Pay Scale Group and Pay Scale Level.

Pay Scale Type:

Two characters alpha-numeric code which is used to define type of business i.e.
Manufacturing / IT / Pharmacy

Pay Scale Area:

Two characters alpha-numeric code which is used to define geographical locations.

Pay Scale Group:

Two characters alpha-numeric code which is used to define classification of wages
based on various criteria.

Pay Scale Level:

Two characters alpha-numeric code which is used to define classification of wages
based on various criteria.

Payroll Area (V_T549A):

Two characters alpha-numeric code which is used to group employees together based
on
- Processing cycle of payroll i.e. Weekly/Fortnightly/Monthly.
- Payment date i.e. 1st of each month for worker and 7 th of each month for manager
and staff.
- Earliest possible retroactive accounting period.
If any one of the above three characteristics differs, a separate payroll area would be
created.

Note : Payroll area is defaulted in infotype 0001-Organizational Assignments via

feature ABKRS.
Note : The Payroll Area of an employee could be changed only after the
successful payroll run in the current payroll cycle of the current payroll area i.e.
the change can not happen in between the payroll processing period.

Payroll control record:

The payroll control record for a payroll area could be viewed through transaction
code PA03.
It defines the current payroll period and payroll past for retroactive accounting
recognition.
It locks the master and time data against changes during the payroll run.
It defines the greatest earliest retroactive accounting period.
It also records the payroll status.
Field Explanations:
Incorrect Pers. Nos:
On clicking this button one gets a list of employees got rejected during the last
payroll run.

SAP HCM - Payroll Administration

List Personnel Numbers:

On clicking this button one gets a list of employees included in the selected payroll
area.
Locked Pers. Nos:
On clicking this button one gets a list of employees locked in infotype 0003 (Payroll
Status), and thus kept out of payroll run.
Payroll Area:
This section indicates the payroll area for which the payroll control record is
applicable for. For each payroll area, only ONE Payroll Control Record can exist at a
time.
Payroll Status:
This section indicates, with a green tick, at what stage a payroll run is currently in.
It also defines the current payroll period with exact dates and indicates how many
times a payroll has been run.
-

Released f Payroll : This is ticked () when payroll is to be processed.

Rel. for correction : This is ticked () when master data is to be changed.
Exit Payroll : This is ticked () once payroll (live mode) has been run and system
has to be made ready for next month payroll run.

Payroll Period:
This reflects the payroll period for which the payroll is to be processed.
Run:
This reflects the no. of times payroll has been run for a single payroll period.
Earliest Retro Acctg. Period:
This section indicates the period up till which the system can go in past to check the
data. This period could be modified only when Exit Payroll status is clicked.

Payroll status:
Payroll status at individual level is maintained in Infotype 0003. This could be seen via
transaction code PU03.
It is created automatically by the system, in the background, during the Hiring
Action.
It automatically stores data that controls the employees payroll run and time
evaluation.
Data is updated automatically when time is evaluated, payroll is run, or changes are
made to the payroll
past.

Note : Data stored in infotype 0003 should be changed ONLY in exceptional

cases, as these changes will affect the employees payroll processing and/or
retroactive accounting.

Field Explanations:
Payroll/Retroactive Accounting

SAP HCM - Payroll Administration

Earl. pers. RA date - Earliest personal retroactive accounting date:
It defines the date in the payroll past up to which master and time data changes
are allowed.
Note : Out of the three dates/period i.e. the Earliest Retroactive Accounting
Period (stored in control record) the Earliest Personal
Retroactive Accounting Date (stored in 0003), the Hiring Date of an
employee, the system picks the latest date as the
retroactive accounting limit.

Accounted to This date specifies the date up to which payroll has been run for the employee.
Run payroll up to This date specifies the date up to which the payroll is run for the employee, even
if he or she has left the company.
Earliest MD change When employee data relevant to payroll is changed, the system stores the
earliest date from which the master data change is valid.
Do not account after This date specifies the date up to which the payroll is run for the employee. After
this date payroll can not be processed.
Mast. data. chng. bonus This field is similar to Earliest MD change but related to the payment of bonus.
Generally applicable to US.
Time Evaluation
Earl. pers. rec. date - (Earliest personal retroactive accounting date)
This section stores the date up to which the system can go in past to evaluate
time data for employee during time evaluation process.
Pers. calendar from - (Personal calendar from)
This section indicates the date up to which the system can go in past to evaluate
time data for employee during time evaluation
PDC recalculation - (Earliest personal retroactive accounting date)
PDC error indicator This section indicates the period up till which the system can go in past to check
the data. This period could be modified only when Exit Payroll status is clicked.

Period Parameter:
Two digit numeric character which decides the interval of payroll run i.e. Monthly for
staff or weekly for contract labours.
For India period parameter is 67.

Date Modifier:
Two digit numeric character which decides the date of payment i.e. 1 st of each month
for worker and 7th for management and staff.

Section 80 Deductions:

SAP HCM - Payroll Administration

These are pre tax deductions from the Gross Taxable Income. Maintained in 0585.
Medical Premium, Pension Funds, Donations, PM Relief Fundetc.

Section 80 C Deductions:
These are pre tax deductions from the Gross Taxable Income. Maintained in 0586.
LIC, ULIP, PPF, NSC, Mutual Fund, Housing Loan, Tuition Feeetc.

Commonly used Infotypes (India):

0580 - Previous Employment Tax Detail
(HRA/CLA/COA)
0582 - Exemption (LTA/Medical/Education/Hostel)
Conveyance
0584 - Income from other sources
Deductions
0586 - Section 80C Deductions

0581

0583

0585

Housing
Section

Car
80

0587 - PF Contribution

0588 - Other Statutory Contribution (ESI, P.Tax, LWF)

0589
Reimbursement
0590 - Long Term Reimbursement (Car Maintenance & Hard Furnishing)
0591 - Nominations (For ESI, PF, Pension, Gratuity)

Individual

Commonly used Tables:

V_T511 - Wage Type Characteristics
V_512W_D
Processing,
Cumulation, Evaluation
V_T539A - Default of Basic wage type
V_T539J - Wage Type Valuation
V_T7INA9 - Eligibility for RAPs (Stores wage codes with tax code limits)

Commonly used Transaction Codes:

PC00_M40_CALC - Start payroll
PC_PAYRESULT - Check
Payroll Result
PC00_M40_CEDT - Pay slip
PC00_M40_CDTA - Bank
Transfer
PC00_M99_CIPE - Execute run - Posting to Accounting
PU01 Delete Payroll
result
PUOC_40 - Off Cycle Workbench
Commonly used Features:
TARIF - Default Pay Scale Type, Pay Scale Area and Planned Remuneration Type in
infotype 0008.
Return Value: XX/YYZ
XX-Pay Scale Type, YY Pay Scale Area, Z Planned
Remuneration Type
LGMST - Default of wage types based on payscale structure in infotype 0008 (Basic
Pay).
Return Value: XXYYYYYYYY
XX-Max. no. of wage types, YYYYYYYY Wage type model from T539A

Note : A maximum of 40 wage types could be stored in infotype 0008 (Basic

Pay).

40ECS - Feature for determining eligibility for RAPs.

40EPF - Default for PF Trust.

Payroll Driver:

SAP HCM - Payroll Administration

SAP has developed country-specific payroll drivers, which are used for processing
payroll results through payroll run.
For India the payroll driver is - PC00_M40_CALC

Payroll Schema:
The payroll schema contains calculation rules to be used by the payroll driver during
payroll run. SAP has developed country-specific schemas.
For India payroll schema is IN00

Note : For our use we do not make use of standard schema. We copy the
standard schema IN00 to ZN00 and make use of it.

Remuneration Statement:
Once the payroll is run the result could be reflected in the form of remuneration
statement also known as Pay slip.
For India, the remuneration statement could be viewed by using transaction code :
PC00_M40_CEDT