Indian Payroll SAP

SAP - Payroll
Agenda
Background Payroll Concepts Payroll Coverage - Detailed
SAP India 2001, India Payroll Core , P.Rajesh 2
Functional Procedure
The Process
Master Data
Payroll
Post Payroll Reports
Process Flow
INPUT
Master data Time Data Past Data Cumulations
CALC
RESULTS
OUTPUT
Gross Earnings Perks
Net Income Tax Prof Tax PF Recoveries
Cluster RT CRT
Statutory Reporting Monthly Half yearly Annual Interfaces FI/CO posting Bank transfer Payment of taxes Statutory payments Third party deductions
Factors influencing HR Localisation
Legal & Statutory
Common Business Practices
Requirements
Industry Specific Practices
HR
Geographic Variations
Private Sector
Public Sector
Payroll Coverage - Overview
Payroll functional coverage - Legal
Income Tax Professional Tax Provident Fund Payment of Gratuity Payment of Bonus ESI Labour Welfare Fund
Payroll functional coverage - Business
Previous Employment Tax Income from other sources Basic salary & increments Housing Car & Conveyance Medical & other reimbursements Leave Travel Allowance Dearness Allowance Other allowances
Loans
Furniture
Other non -annual allowances Claims processing Flexible Packages Full & Final settlement Integration with SAP FI/CO Reports
Payroll India - Vital statistics
Modified International infotypes 12 India specific infotypes 60 Indian tables Rules, schemas, Payroll Driver 4 Indian valuation methods
Payroll reports
Form 5 Form 10 Form 16 Form 24 Form 7 (ESI) Form 6 (ESI)
Wage Type Statement Wage Type Distribution Payroll Journal Payroll Annual Display Post Payroll Check Printing
Form 3A
Form 6A Ptax returns Form 217 2(A)
Post Payroll
Data Medium Exchange Cash Breakdown List
PAYROLL CONCEPTS
Wage structure - concepts
1 2 % 3
Wage Types 1..n Allowance Grouping
Parameters like Location, Grade etc..
$ Earning/Deduction Payable/Non Payable Taxable/Non Taxable
Recurring /Non Recurring Attendance Based? Calculation / Entry
Employee
Payroll - General Functionality
1 2$ % 3
Gross payroll accounting with automatic wage calculation
Full gross/ net retroactive accounting

Freely definable pay slip
Data exchange with banks, insurance agencies, etc. Direct integration to FI and CO Online or batch processing
Parallel payroll runs (on different Appl. Servers)
Indirect Valuation Module VARIANT A
Indirect Valuation Module VARIANT B & C

Inval B M230 = 50% (MB10 + MD10) + 500
Inval C M230 = Minimum of { 50% (MB10 + MD10) & 500 }
Indirect Valuation Module VARIANT D
INVAL B & C
Micro Level Indirect Valuation

e.g. Children education allowance Rs 250 per child INVAL A,B,C or D
Feature 40ECS Returns a Factor
PAYROLL COVERAGE DETAILED
Organisational Assignment
Enterprise Structure Personnel Structure Organisation Structure
Personal Data - IT 0002
Payroll Status - IT 0003
Planned Working Time - IT 0007
Basic Pay - IT 0008
Pay Parameters
Wage Types
Bank Details - IT 0009
Recurring Payments/Deductions - IT 0014
Additional Payments - IT 0015
Contract Elements - IT 0016
Monitoring Dates - IT 0019
Family/Related Person - IT 0021
Childrens Education / Hostel Allowance Exemption
Membership Fees - IT 0057
Personal IDs - IT 0185
Master Data (Indian)
IT 580 IT 581 IT 582 IT 583 IT 584 IT 585 IT 586 IT 587 IT 588 IT 590 IT 591
Previous Employment Tax Details Housing (HRA/CLA/COA) Exemptions Car & Conveyance Income From Other Sources Section 80 Deductions Investment Details (Section 88) Provident Fund Contribution Other Statutory Deductions Long Term Reimbursements Nominations
Previous Employment Tax Details

PF contributed Sec 10 exemptions availed Medical exemption claimed LTA availed Tax deducted so far
Income from other sources

House property details Business profits Capital gains
Dividends
Interests
Housing
Eligibility details House Rent Allowance Rent details Co. Leased Accommodation Co. Owned Accommodation Differential payment HRA exemption amount
Calculation of perk value in case

of leased accommodation Value of helper Value of furniture
Leave Travel
Annual Reimbursement based on eligibility Definition of block of 4 years Travel Details Link to Leave
Carry forward of LTA
Medical Reimbursement
Car & Conveyance - IT 0583
Investments
Investments made by employee for getting tax exemptions or rebates maintain the Section 80/88 limits
Hard Furnishing Scheme

Perk value of assets can be maintained Maintenance of block of years Amount check against eligibility
Perk calculation for the year

based on the total value Other non - annual reimbursements Transfer of asset
Provident Fund
Multiple trusts Choice of Basis
Contributions from Employer

Contributions from Employee Payment to pension
Voluntary Provident Fund
Other Legal Requirements
ESI Professional Tax Labour Welfare fund
Professional Tax
Coverage of Multiple methods for processing
Frequency - Monthly, Half yearly, Annual Salary definition - Wage types, Actuals Retroactive processing
Forms for returns
Coverage of states
Tamilnadu Gujarat
Maharashtra
Madhya Pradesh Karnataka West Bengal Andhra Pradesh
Kerala
Nominations
ESI benefit Gratuity benefit Provident Fund benefit Pension benefit
Income tax
As per Indian tax laws Calculation of the tax based on the investments made and the standard deduction User definable tax slabs and percentages Tax calculation based on actual investment or Proposed investment
Company Loans
Classify a loan as an Installment or Annuity loan. Configuration of Interest Calculation method. Configuration of Interest Calculation days. Configuration of Interest rates Configuration of frequencies for repayment and interest Loan payment / repayment can be via payroll / external means. Disbursement of the approved loan amount in installments.
Display the Proposed Disbursement Plan for the employee for the loan being created.
Computation of interest rate advantage on interest free or subsidized loans.
Cumulation of Interest rate advantage as above to annual perk amount.

Computation of Penal Interest due to Foreclosure of loans . Simulation of loan repayment Plan.
Company Loans
Eligibility Checks during Loans Info type Creation:
Define Loan Grouping for India dependent on loan type and ALGRP Define Loan Grouping for India dependent on loan type and ALGRP Maintain Loan Eligibility Checks and limits
Check for the following during a new loan creation
Minimum Experience Maximum Age Months allowed between Current and Previous loan Number of outstanding loans allowed at a time Maximum number of loans allowed during the entire service Total Outstanding loan amount allowed Approved loan amount a minimum of Salary , % asset value and a fixed amount definable by customer.
Company Loans
New Options in Loans Info type: 1. Calculate Repayment Installment 2. Display Proposed Disbursement Plan 3. Simulate Penal Interest due to loan foreclosure
Company Loans
Reports for Company Loans:
Loan Summary Report : For a given period and loan types,the report displays various details like interest, principal, interest subsidy etc. employee wise.
2. Batch Program for Penal Interest due to Loan Foreclosure: This report is used to update the Additional Payments Info type (0015) with the Penal Interest Amount in case of loans foreclosure
Off Cycle Payments

Info type 0267 for capturing Off cycle payments Off cycle for Bonus type runs have been enabled Professional Tax computation for bonus payments in off cycle is considered Tax on bonus can be computed using different methods Reimbursements can be paid in off cycle payments using claims module
Off Cycle Work Bench
Third Party Deductions

Infotype 0057 Deduction in Payroll Frequency of the Payment can be defined Linkage to Sec88 Rebate in Payroll Linkage to Sec80 Exemptions in Payroll Different Payee options
Third Party Deductions

Deductions
Claims Processing
Processing reimbursements to the employee in regular or off cycle payroll run
Eligibility Types Amount Numbers e.g. Rs. 24000 for Medical Reimbursement e.g. 250 Liters of petrol
Amount subjected to number of times e.g Stitching allowance eligibility upto Rs. 1000 can be claimed in a year and can be claimed twice Validity periods for each reimbursement type can be configured Monthly, Financial year, Calendar year, customer definable year ..etc Capture company specific additional data for each reimbursement. Upload balances at the beginning of the validity period Check on balance available against component - Carried Forward & Current Year eligibility Validity period (Year) end processing options Payment of outstanding balance, Taxation of Amount Carry forward of the balance to the next year
Lapse
Claims Processing Data Entry
Data Upload from External File
Claims Processing Results
Claims Processing Balance Reporting
Claims Processing Balance Reporting
One Day Salary Deduction

Configurable at the pay scale grouping for allowances.
Pay Period and the Year for the deduction can be defined. Different calculation methods for basis Factor
Can be configured for Employers equal contribution.

Can be customized for Section 80/88 exemption
Salary Packaging
Companies switching from traditional pay structure to Flexible pay Total Package offering and Cost to the company Flexible arrangement for employees to choose from a range of benefits together with a cash salary and fixed set of components. Take home pay analysis for employee.
Salary packaging combines data from all sources into a manageable

central location and then updates data when process of Salary packaging is complete. Employee Self Service
Salary Packaging
Grouping
of components at organization level
Common Interface for all type of payments and eligibility

e.g. Employee can opt for Leave Travel allowance only if he is eligible
Mandatory components and fixed % of some components
Maximum and Minimum limits
Customer specific checks
Salary Packaging
Single
Interface for Infotypes and limits validity
Eligibility Payroll
simulation for take home pay analysis

Individual
eligibility definition for
claims
TDS on BONUS
Tax deducted at source during offcycle runs for bonus payments. Maintain Bonus payments in Infotype 0267.
Methods of Tax Calculation
Tax at a standard rate to be used across a Company. Tax at the individual employee's marginal rate of tax (excluding surcharge or including surcharge) before the payment of bonus or after the payment of bonus
oThere are 5 different methods to compute TDS. The choice of which method first parameter maintained in the schema against function INBTD. oMultiple bonuses can be paid in the same offcycle run. oCustomer Exit provided to override TDS computed by SAP.
Rounding off net pay
Rounding options can be configured at the Pay Scale for allowances Grouping level. Configurable rounding Options
Configurable recovery of rounded off options
Dearness Allowance
Fixed DA,Variable DA Configurable Index codes for various Consumer Price

Indices.
Methods of calculating DA. Non-Slab based calculation. Basic slab based calculation. Incremental basic slab based calculation. CPI slab based calculation. Incremental CPI slab based calculation. Basic slab based calculation, subject to minimum
value
A report program generates a batch session, which will

populate the Basic Pay Infotype (IT0008) with relevant wagetype and amount for DA (both fixed and variable) by reading the configuration tables.
DA calculations
Calculation rules defined for a Allowance Grouping
CPI Value for the DA Index codes
Fixed DA Variable DA
Basic Increments Increment method based on

Amount Percentage
Definable Basic codes for Increment methods. Slabs can be defined for basic codes For Percentage based increment, the increment can be calculated as a Percentage of
Average of Minimum Basic and Maximum Basic of slab, Minimum Basic of slab, Current Basic
Customer Configurable Increment Criteria Promotion criteria is based on

Minimum age for promotion Minimum experience in the current Payscale Group and Payscale Level Minimum appraisal points Confirmation Status
Report program will create a Batch session to update the basic wagetype and delimit Basic Pay
Infotype (IT0008) with the reference date.
Basic Increments
Increment method assigned to a basic code and Allowance Grouping
Amount based increment given for a set of employees
Basic pay and personal pay Wagetype assigned to an allowance grouping
Basic slabs with the increment range and amount

Superannuation
Customer definable
Superannuation trust IDs for the various trusts.
Employers Contribution
percentage
Frequency of contribution
(Monthly/Annual)
Contributions can be for

calendar year or financial
Option for making provisions

for monthly contributions
Mid Year Go Live
Going Live on India Payroll
How ? From 1st April Mid year - effective from April Mid year using schema INLK Legacy data
Tax calculation
Reports and legal forms
Mid Year Go Live

Pre go live periods T558B
Value from the legacy system
T558C
Payroll run with schema INLK
Sample Payslip
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Indian Payroll SAP

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Indian Payroll SAP

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SAP - Payroll

Background Payroll Concepts Payroll Coverage - Detailed

SAP India 2001, India Payroll Core , P.Rajesh 2

Post Payroll Reports

SAP India 2001, India Payroll Core , P.Rajesh 3

Gross Earnings Perks

Net Income Tax Prof Tax PF Recoveries

SAP India 2001, India Payroll Core , P.Rajesh 4

Factors influencing HR Localisation

Legal & Statutory

Common Business Practices

Industry Specific Practices

SAP India 2001, India Payroll Core , P.Rajesh 5

Payroll Coverage - Overview

Payroll functional coverage - Legal

SAP India 2001, India Payroll Core , P.Rajesh 8

Payroll functional coverage - Business

SAP India 2001, India Payroll Core , P.Rajesh 9

Payroll India - Vital statistics

SAP India 2001, India Payroll Core , P.Rajesh 10

Form 5 Form 10 Form 16 Form 24 Form 7 (ESI) Form 6 (ESI)

SAP India 2001, India Payroll Core , P.Rajesh 11

Wage structure - concepts

$ Earning/Deduction Payable/Non Payable Taxable/Non Taxable

Recurring /Non Recurring Attendance Based? Calculation / Entry

SAP India 2001, India Payroll Core , P.Rajesh 14

Payroll - General Functionality

Full gross/ net retroactive accounting

Parallel payroll runs (on different Appl. Servers)

SAP India 2001, India Payroll Core , P.Rajesh 16

Indirect Valuation Module VARIANT A

SAP India 2001, India Payroll Core , P.Rajesh 20

Indirect Valuation Module VARIANT B & C

Inval C M230 = Minimum of { 50% (MB10 + MD10) & 500 }

SAP India 2001, India Payroll Core , P.Rajesh 21

Indirect Valuation Module VARIANT D

Micro Level Indirect Valuation

SAP India 2001, India Payroll Core , P.Rajesh 23

PAYROLL COVERAGE DETAILED

Enterprise Structure Personnel Structure Organisation Structure

SAP India 2001, India Payroll Core , P.Rajesh 26

Personal Data - IT 0002

SAP India 2001, India Payroll Core , P.Rajesh 27

Payroll Status - IT 0003

SAP India 2001, India Payroll Core , P.Rajesh 28

Planned Working Time - IT 0007

SAP India 2001, India Payroll Core , P.Rajesh 29

Basic Pay - IT 0008

SAP India 2001, India Payroll Core , P.Rajesh 30

Bank Details - IT 0009

SAP India 2001, India Payroll Core , P.Rajesh 31

Recurring Payments/Deductions - IT 0014

SAP India 2001, India Payroll Core , P.Rajesh 32

Additional Payments - IT 0015

SAP India 2001, India Payroll Core , P.Rajesh 33

Contract Elements - IT 0016

SAP India 2001, India Payroll Core , P.Rajesh 34

Monitoring Dates - IT 0019

SAP India 2001, India Payroll Core , P.Rajesh 35

Family/Related Person - IT 0021

Childrens Education / Hostel Allowance Exemption

SAP India 2001, India Payroll Core , P.Rajesh 36

Membership Fees - IT 0057