SAP Note

Header Data

Symptom

Employees in your ogranization are employed in the state where the Labour Welfare Fund (LWF) contribution should happen based on the salary of the employee. Currently the same amount is contributed for LWF irrespective of the employee's salary.

Other Terms

LWF, Labour Welfare Fund, Universal type, universal grouping, INUCD, Other statuatory and non-statuatory contribution

Reason and Prerequisites

Legal change and further enhancement

Solution

Background and requirement It is required that in some states the LWF contribution should happen as per the salary of the employee. However, there was no provision to capture the slab ranges in the system to maintain the LWF contribution amounts. Hence the functionality is enhanced to allow the slab based contribution for LWF. Enhancement Slab based contribution is made applicable for LWF in some states. However there might be other contributions also which needs to be made based on slab ranges. These could be legally required (standard), or it could also be customer specific contributions/deductions. Considering this possibility, the changes are made such that the solution provided for LWF as of now can be enhanced for other contribution types also. Thus new objects are created such that they could cater to any such possible enhancement. This new functionality is addressed as 'Universal contribution'. Glossary Following concepts are keys to the design and use of this new functionality:

l Universal Type:

                       Universal Type refers to the type of contribution. Thus LWF Contributionis a Universal Type. Employee State Insurance (ESI) could be another such Universal Type. Similarly there could be customer specific contributions/deductions also.

                       Each Universal Type is identified by a 4 character string. For Labour Welfare Fund contribution, Universal Type is 'LWF'. Customers can create their own Universal Type which are not used in the standard.

l Universal Grouping:

                       Universal Grouping is logical grouping of employees based on different contribution parameters. Thus employees contributing as per same slabs for a given Universal Type can be grouped together under one Universal Grouping. The other parameters that could be used for grouping are first period of contribution in the financial year, frequency of the contribution, computation method of the contribution etc.

l Slab code:

                       Slab code is the grouping of slabs for the given Universal Type and Universal Grouping. Thus one slab code could represent the slab ranges applicable for one type of contribution.

    973398 - Slab based LWF contribution and Universal contribution  

Version   1     Validity: 17.08.2006 - active   Language   English

Released On 31.08.2006 14:03:07 By Gajan Kumar R (I035120)

Release Status Released for Customer

Component PY-IN India

Priority Correction with medium priority

Responsible Mukesh Kumar Rai ( I020401 )

Processor Gajan Kumar R ( I035120 )

Category Legal change

Relevant for Translation No

New objects

l Tables and Views:

              Three new tables and corresponding views are created:

¡ V_T7INU1 (State for Universal Grouping)

                       This view should be configured to maintain the State (region) and Address against the Universal Type and Universal Grouping combination. State determined from thie view based on these two key parameters is used to read the contribution parameters.

                       This view can be accessed through the IMG activity at path:

                       Payroll --> Payroll: India --> Other Statutory and Non-Statutory Deductions --> Assign State for Universal Grouping

¡ V_T7INU3 (Slab codes for states)

                       This view should be configured to return proper slab code based on the State (region) determined through view V_T7INU3. This slab code could be used to read the actual slabs and thus to determine the contribution amounts. Besides slab code, this view also contain other contribution parameters - first period of contribution in the financial year, the frequency of contribution, computation method of the contribution etc.

                       This view can be accessed through the IMG activity at path:

                       Payroll --> Payroll: India --> Other Statutory and Non-Statutory Deductions --> Assign Slab Code and Other Parameters for Each State

¡ V_T7INU5 (Contribution Value for Each Slab)

                       This view should be configured with the actual contribution amounts against different slab ranges. It contains amount and rates for employee and employer contribution

                       This view can be accessed through the IMG activity at path:

                       Payroll --> Payroll: India --> Other Statutory and Non-Statutory Deductions --> Assign Contribution Value for Each Slab

l Payroll function INUCD:

              A new payroll function INUCD (Other Statutory  and Non-Statutory Deductions) is created to process the Universl Contribution Types. Referto the payroll function documentation for further details.

l Wage type:

              Currently only LWF contribution is implemented using Universal contribution functionality. For this slab based contribution, a basis wage type is required. This wage type is specified as parameter 2 in the payroll schema with payroll function INUCD.

              For Universal Type 'LWF', basis wage type is /140 (LWF Basis) is created. It is a cumulation wage type. Hence the salary components which should constitute this basis wage type for LWF should be marked for cumulation class 40 in the view V_512W_D and processing class 20 should be such that cumulation takes place (for example specification 3)

              Similarly when the Universal Type is created for any customer specific contribution/deduction, a basis wage type should be used alongwith it while performing payroll function INUCD.

For details description regarding the usage of payroll function INUCD, refer to its documentation. Customizing changes

l IMG Activities:

                       The IMG Activities described under New Objects section above should be performed and relevant customizing entries should be maintained

l Schema changes:

                       In the standard payroll schema, the payroll function INLWF is no longer used at subschema INN1 to compute the LWF contribution. Instead now payroll function INUCD is called with appropriate parameters. The schemain all the clients should be adjusted accordingly.

The corrections released through this SAP Note include non-source code corrections. To get the corrections, apply the HR Support Package(s) indicated for your release in the Reference to Support Packages section of this Note.

Validity

Software Component From Rel. To Rel. And Subsequent  

Support Packages & Patches

SAP_HR 46C 46C  

Support Packages

Software Component Release Support Package

HR-IN 10 SAPKICIC60

SAP_HR 500 SAPKE50026

600 SAPKE60009

470 SAPKE47060

46C SAPKE46CB5