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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.
Advanced Science and Technology Letters Vol.147 (SMART DSC-2017)
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.
Advanced Science and Technology Letters Vol.147 (SMART DSC-2017)
Copyright © 2017 SERSC 89
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
Advanced Science and Technology Letters Vol.147 (SMART DSC-2017)
90 Copyright © 2017 SERSC
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,
Advanced Science and Technology Letters Vol.147 (SMART DSC-2017)
Copyright © 2017 SERSC 91
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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