indian payroll sap

SAP - Payroll

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

AgendaBackgroundPayroll ConceptsPayroll Coverage - Detailed


Functional ProcedureMaster DataPayrollThe ProcessPost Payroll Reports


Process Flow INPUT CALC RESULTSOUTPUTMaster dataTime DataPast DataCumulationsGross Net Earnings Perks Income Tax Prof Tax PF Recoveries

Cluster

RTCRTStatutory ReportingMonthlyHalf yearlyAnnual

InterfacesFI/CO postingBank transfer

Payment of taxesStatutory payments

Third party deductions


Factors influencing HR LocalisationLegal & Statutory Requirements Common Business PracticesGeographic VariationsPrivate SectorPublic SectorIndustry Specific Practices

Payroll Coverage - Overview


Payroll Focus

Run managerial payrollMonetary aspects of payrollStatutory complianceMeet a set of business needsEnhancementsNon-managerial payrollNon-monetary aspects of payrollEnhanced flexibility


Payroll functional coverage - Legal

Income TaxProfessional TaxProvident FundPayment of GratuityPayment of BonusESILabour Welfare Fund


Payroll functional coverage - Business

Previous Employment Tax Income from other sourcesBasic salary & incrementsHousingCar & ConveyanceMedical & other reimbursements Leave Travel AllowanceDearness AllowanceOther allowancesLoansFurnitureOther non -annual allowancesClaims processingFlexible PackagesFull & Final settlementIntegration with SAP FI/CO Reports


Payroll India - Vital statistics

Modified International infotypes12 India specific infotypes60 Indian tablesRules, schemas, Payroll Driver4 Indian valuation methods


Payroll reports

Form 5Form 10Form 16Form 24Form 7 (ESI)Form 6 (ESI)Form 3AForm 6APtax returnsForm 217 2(A)

Wage Type StatementWage Type DistributionPayroll JournalPayroll Annual DisplayPost Payroll Check PrintingPost PayrollData Medium ExchangeCash Breakdown List


Salient Points of Payroll

Integration HR /FISingle Point of data entryIndia specific valuation methodsAny number of Wage TypesParameters for Wage TypesRetroactive AccountingIncome Tax computation

Process salary 99 timesSimulation payroll runsClaims processingPerquisitesEligibility Vs. Payment checksUser definable payslipGroup Vs. Employee level eligibilityIncome from other sourcesTax exemptionsPF options

PAYROLL CONCEPTS


Wage structure - conceptsWage Types 1..nPayable/Non PayableRecurring /Non RecurringTaxable/Non TaxableAttendance Based?Allowance GroupingCalculation / EntryEarning/DeductionEmployeeParameters like Location, Grade etc..


Wage structure - conceptsWage Elements - salary components e.g.basic pay / HRA etcNo restriction to number of wage elements Manually entered or computed by systeme.g. PF - 12%(Basic + DA)Payment or deduction Wage type Normal payment- BasicRecurring payment - OvertimeAdditional payment -Bonus.


Payroll - General FunctionalityGross payroll accounting with automatic wage calculationFull gross/ net retroactive accounting Freely definable pay slipData exchange with banks, insurance agencies, etc.Direct integration to FI and COOnline or batch processingParallel payroll runs (on different Appl. Servers)


Pay structure - conceptsPayscale type - based on industry/ business e.g.Oil / Power / IT Payscale Area - based on locatione.g. Plant / Head officePayscale group - on salary grade eg. Grade A etcPayscale level - further classification e.g. Sales / Non sales etc.


Allowance GroupingIT 8Pay Scale Type / Area / Group / LevelIT 1Employee Sub GroupAllowance Grouping Wage types Processing Rules Quantum+ Micro Criteria+ Customer Infotypes


Indirect Valuation ModuleADBCFixed ValueSlabs of Basic SalaryFactor of WTs% Subject toa limitHRA = 40% of Basic Salary + Rs. 2000Medical = 100% of basic s.t. Rs.15,000HRA = Rs.6000BasicHRA< 50005 -7000>7000150018002500


Indirect Valuation Module VARIANT A


Indirect Valuation Module VARIANT B & CInval BM230 = 50% (MB10 + MD10) + 500

Inval CM230 = Minimum of {50% (MB10 + MD10) & 500 }


Indirect Valuation Module VARIANT DINVAL B & C


Micro Level Indirect Valuatione.g. Children education allowance Rs 250 per child INVAL A,B,C or DFeature 40ECS Returns a Factor

PAYROLL COVERAGE - DETAILED


Infotypes - InternationalIT 1Organizational AssignmentIT 2Personal DataIT 3Payroll StatusIT 7Planned Working TimeIT 8Basic PayIT 9Bank DetailsIT 14Recurring Payments / DeductionsIT 15Additional PaymentsIT 16Contract ElementsIT 19Monitoring DatesIT 21Family Details *IT 57Membership FeesIT 185Personal IDs *


Organisational AssignmentEnterprise StructurePersonnel StructureOrganisation Structure


Personal Data - IT 0002


Payroll Status - IT 0003


Planned Working Time - IT 0007


Basic Pay - IT 0008Pay ParametersWage 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 0021Childrens Education / Hostel Allowance Exemption


Membership Fees - IT 0057


Personal IDs - IT 0185


Master Data (Indian)IT 580Previous Employment Tax DetailsIT 581Housing (HRA/CLA/COA)IT 582ExemptionsIT 583Car & ConveyanceIT 584Income From Other SourcesIT 585Section 80 DeductionsIT 586Investment Details (Section 88)IT 587Provident Fund ContributionIT 588Other Statutory DeductionsIT 590Long Term ReimbursementsIT 591Nominations


Previous Employment Tax DetailsPF contributed Sec 10 exemptions availedMedical exemption claimedLTA availedTax deducted so far


Income from other sourcesHouse property detailsBusiness profitsCapital gainsDividendsInterests


HousingEligibility detailsHouse Rent AllowanceRent detailsCo. Leased AccommodationCo. Owned AccommodationDifferential paymentHRA exemption amountCalculation of perk value in caseof leased accommodation Value of helperValue of furniture


Leave TravelAnnual Reimbursement based on eligibilityDefinition of block of 4 yearsTravel DetailsLink to LeaveCarry forward of LTA


Medical Reimbursement


Car & Conveyance - IT 0583


InvestmentsInvestments made by employee for getting tax exemptions or rebates maintain the Section 80/88 limits


Hard Furnishing SchemePerk value of assets can be maintainedMaintenance of block of yearsAmount check against eligibilityPerk calculation for the year based on the total valueOther non - annual reimbursementsTransfer of asset


Provident FundMultiple trustsChoice of BasisContributions from EmployerContributions from EmployeePayment to pensionVoluntary Provident Fund


Other Legal RequirementsESI Professional TaxLabour Welfare fund


Professional TaxCoverage of Multiple methods for processingFrequency - Monthly, Half yearly, AnnualSalary definition - Wage types, ActualsRetroactive processingForms for returnsCoverage of statesTamilnaduGujaratMaharashtraMadhya PradeshKarnatakaWest BengalAndhra PradeshKerala


NominationsESI benefitGratuity benefitProvident Fund benefitPension benefit


Income taxAs per Indian tax lawsCalculation of the tax based on the investments made and the standard deductionUser definable tax slabs and percentagesTax calculation based on actual investment or Proposed investment


Company LoansClassify a loan as an Installment or Annuity loan.Configuration of Interest Calculation method.Configuration of Interest Calculation days.Configuration of Interest ratesConfiguration of frequencies for repayment and interestLoan 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 LoansEligibility 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 ALGRPMaintain Loan Eligibility Checks and limitsCheck for the following during a new loan creationMinimum ExperienceMaximum AgeMonths allowed between Current and Previous loanNumber of outstanding loans allowed at a timeMaximum number of loans allowed during the entire service Total Outstanding loan amount allowedApproved loan amount a minimum of Salary , % asset value and a fixed amount definable by customer.


Company LoansNew Options in Loans Info type:1. Calculate Repayment Installment2. Display Proposed Disbursement Plan3. Simulate Penal Interest due to loan foreclosure


Company LoansReports 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 PaymentsInfo 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 PayrollFrequency of the Payment can be definedLinkage to Sec88 Rebate in PayrollLinkage to Sec80 Exemptions in PayrollDifferent Payee options


Third Party DeductionsDeductions


Claims ProcessingProcessing reimbursements to the employee in regular or off cycle payroll runEligibility TypesAmount e.g. Rs. 24000 for Medical ReimbursementNumbers e.g. 250 Liters of petrolAmount subjected to number of times e.g Stitching allowance eligibility upto Rs. 1000 can be claimed in a year and can be claimed twiceValidity periods for each reimbursement type can be configuredMonthly, Financial year, Calendar year, customer definable year ..etcCapture company specific additional data for each reimbursement.Upload balances at the beginning of the validity periodCheck on balance available against component - Carried Forward & Current Year eligibilityValidity period (Year) end processing optionsPayment of outstanding balance, Taxation of AmountCarry forward of the balance to the next yearLapse


Claims Processing Data EntryData Upload from External File


Claims Processing Results


Claims Processing Balance ReportingClaims Processing Balance Reporting


One Day Salary DeductionConfigurable 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 PackagingCompanies 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 PackagingGrouping of components at organization level Common Interface for all type of payments and eligibilitye.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 PackagingSingle Interface for InfotypesEligibility and limits validityPayroll simulation for take home pay analysisIndividual eligibility definition for claims


TDS on BONUSTax deducted at source during offcycle runs for bonus payments.Maintain Bonus payments in Infotype 0267.

There are 5 different methods to compute TDS. The choice of which method first parameter maintained in the schema against function INBTD.Multiple bonuses can be paid in the same offcycle run.Customer Exit provided to override TDS computed by SAP.

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


Rounding off net payRounding options can be configured at the Pay Scale for allowances Grouping level.Configurable rounding OptionsConfigurable recovery of rounded off options


Dearness AllowanceFixed DA,Variable DAConfigurable 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 GroupingCPI Value for the DA Index codesFixed DAVariable DA


Basic IncrementsIncrement method based on AmountPercentageDefinable Basic codes for Increment methods.Slabs can be defined for basic codesFor 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 BasicCustomer Configurable Increment Criteria Promotion criteria is based on Minimum age for promotionMinimum experience in the current Payscale Group and Payscale LevelMinimum appraisal pointsConfirmation StatusReport program will create a Batch session to update the basic wagetype and delimit Basic Pay Infotype (IT0008) with the reference date.


Basic IncrementsIncrement method assigned to a basic code and Allowance GroupingAmount based increment given for a set of employeesBasic pay and personal pay Wagetype assigned to an allowance groupingBasic slabs with the increment range and amount


SuperannuationCustomer definable Superannuation trust IDs for the various trusts.Employers Contribution percentageFrequency of contribution (Monthly/Annual)Contributions can be for calendar year or financial Option for making provisions for monthly contributions


Mid Year Go LiveGoing 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 LiveT558BT558CPre go live periodsValue from the legacy system


Payroll run with schema INLK


Sample Payslip


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indian payroll sap

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