-Broadly speaking, payroll accounting is the calculation of payment for work performed by each employee. More specifically, however, payroll accounting comprises a number of work processes including the generation of payroll results and remuneration statements, bank transfers and check payments.
–Payroll accounting also includes a number of subsequent activities:
transfer of payroll results to Accounting
various evaluations, such as evaluating the payroll account.
-The calculation of payment comprises two main steps:
- Calculation of remuneration elements
- Statutory and voluntary deductions (country-specific)
-Both the remuneration elements and the statutory and voluntary deductions consist of individual payments and deductions, which are calculated for an employee during a payroll period. These payments and deductions are included in the payment calculation by means of different wage types.
-The employee is usually paid by bank transfer or check and the payment amount is printed in a form for the employee.
-The remuneration elements for an employee are formed from individual wage and salary types that are used during a payroll period. Payments such as basic pay, various bonuses and gratuities are included in the remuneration calculation. Deductions can be made for items such as a company-owned flat, company-sponsored day care or similar benefits. Different factors determine whether such benefits increase or reduce the taxable income. This is determined by country-specific regulations and, in some countries, the philosophy of the company.
-An employee’s remuneration consists of all wage types calculated for him or her during a payroll period.
-Voluntary and statutory deductions, such as tax and social insurance contributions, are taken from the gross calculation to determine the payment amount. Different gross values, for example, total gross amount, and gross tax amount, are used to calculate the deductions. For this reason, different totals are formed during the payroll run, and these totals are be used for subsequent processing.
-If you want to start payroll from the menu, specify first the country, then call up the
control record for the relevant payroll area. Here, you carry out the required steps in
preparation for the payroll run.
-Payroll accounting is usually performed separately for different employee groups. The payroll period is not always the same for all employees. For example, you run payroll for one group at the end of the month for the current month, while for another group you run payroll on a week-day for the previous week.
-We have combined these two factors in the Payroll Area organizational unit.
-Payroll areas facilitate the following functions in Payroll Accounting:
Personnel numbers that are to be included in the same payroll run are grouped together.
The payroll period is defined using specific dates.
-Employees to be included in a payroll run at the same time and for the same payroll period are grouped into one payroll area.
-Personnel numbers are assigned to a payroll area in the Organizational Assignment infotype (0001). It is possible to have a default value for the payroll area entered in the corresponding field. This depends on the assignment of the employee to the personnel subarea and employee group/employee subgroup grouping.
-The SAP HR System uses payroll areas to group together employees for whom payroll is run 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.
-For example, an organization may pay employees on a monthly and weekly basis so at least one monthly and one weekly payroll area must be created. You must also create payroll areas if you want to run payroll for employees at different times.
-The payroll area is used as a selection criterion for many payroll processes. For example, for the payroll run, the remuneration statement, and evaluation reports for the payroll run. If you want to select fewer employees for a payroll run or other evaluations, you can also use additional selection criteria, for example, the cost center, or employee subgroup (only suitable for test or simulation purposes).
-Feature ABKRS delivers a default value for the ‘Payroll Area’ field in infotype 0001(Organizational Assignment).
-You must create a control record in Customizing for each payroll area before it can be used.
-The personnel control record performs the following functions in payroll:
-Defines the payroll past for retroactive accounting recognition.
-Locks master data and time data so no changes can be made during the payroll process. The lock is valid for the payroll past and the payroll present. Changes affecting future payroll runs are still possible.
-Defines the earliest possible retroactive accounting date for each payroll area.
-The control record is maintained either in the Payroll menu under Tools -> Control Record, or in the Payroll menu, from which you may only choose the steps permitted at this point in the payroll process.
-If you choose Tools -> Change Control Record, the ‘Incorrect pers.nos’ pushbutton is displayed. This displays a list of rejected personnel numbers. The list is displayed automatically if you attempt to end a payroll run in which payroll is not complete for all personnel numbers.
You must pay particular attention when creating the payroll control record in your live system. The payroll period used to create the payroll control records must be 1 period before the period in which you want to go live.
Example: You want to use the SAP Payroll system to go live in period 05, 1998. You must enter period 4 as the period in the payroll control record.
-Each employee has an individual payroll status. The necessary data is stored in the Payroll Status infotype (0003). This infotype is created automatically as part of the hiring action and each payroll period is maintained automatically. You will rarely need to make changes to master data. Occasionally, however, you may need to enter employee-specific information relating to Payroll or Time Management, so that it is possible to change particular fields in the Payroll Status infotype manually.
-The payroll driver enters the end date of the last completed payroll period in the “Accounted to” field.
-If master data is changed, the system enters the appropriate date in the “Earliest MD change” field. This date is deleted after each completed payroll run.
-The payroll driver flags the “Payroll Correction” field if a personnel number has been rejected, or you have entered data during the correction phase of the payroll run. The employee is entered in the correction run with this indicator and if payroll is subsequently completed successfully, the indicator is removed. If changes are made in Customizing, the “Payroll Correction” indicator is not set.
-Earliest personal retroactive accounting date: This field is only used if you want to set a retroactive accounting limit for an employee that is different from the date set in the payroll area.
-Do not account after: You can enter a date after which payroll will no longer be performed for an employee. This date must not lie within an active period.
-Run payroll to: If an employee has left the company and continues to be paid after the leaving date, this date is stored in this field. If you are dealing with payments in the payroll past, you do not have to enter a date in this field. This is because such payments are triggered automatically during retroactive accounting.
-Personnel number locked: If this field is flagged, an employee can be locked for payroll. In this case the personnel number will not be selected for payroll.
|Master and |
|· Work Schedules|
· Wage Types
|· Use customizing to set up and generate work schedules|
|· Infotypes 0000, 0001, 0002, 0006, 0007, 0008 and country specific infotypes||· Make copies of model wage types in wage type catalog to state customer wage types is customer name range|
|· Payroll process others infotypes 0014, 0015, 2001, 2010, 2003, 2005|
|· Use personnel actions to enter employee data in the system|
|Administration||· Payroll areas and period|
· Payroll control record
|· Setup and generate using customizing|
· Create using customizing
|· Bank details and information on house banks|
· Cost centers
· Remuneration statements
|· Usually set up by FI|
· Usually set link to Org units
· Retire standard form
Match Code – W
Match code W provides a list of all personnel numbers in the selected payroll area that have been rejected by the payroll run due to incorrect data.
Payroll menu Tools Control record enter Payroll area choose ‘Display’. Choose the Menu path ‘GoTo’ Incorrect Pers. No.
A Log which displays pay roll results. The payroll results are displayed in a ‘tree structure’.
Payroll Process – Overview
Relationship between the Menu and Payroll Control record:-
Function in Menu Status Payroll Control record
Release Pay roll Released for Pay roll
Start Pay roll Payroll program is started and the status of Control record remains -Released Payroll
Check Result Check Pay roll results
Corrections Release for corrections
Exit Payroll Exit Payroll
- Payroll Simulation · Master Data and Time data are not locked
- Data is not written to database
- Payroll periods are not counted in payroll control record
- Release payroll / · Data records are locked for changes in past and released for payroll present
- Changes can still be made in future
- Period in the control record is increased by 1
- Pay roll run can be started
- Start Payroll / Released · Run a live payroll run for a pay roll area or a
for payroll personnel number
- Run payroll for the current period or any other period (for simulation).
- Check Result / Check · Present and past data is locked
- Payroll area is locked for payroll
- Exit payroll / · Data records are released again for changes in
exit Payroll the past and present.
- Payroll area is locked for payroll.
- After exiting payroll, you can only change data for the period in the subsequent payroll period through refractive accruing.
Views of Payroll results
Technical View Employee View Department View
Payroll results Remuneration statement Payroll Account
(RPCLSTR’X’) (RPCEDT X O) Payroll Journal
Statements (HINCEDTO) · Wage Type
Distribution Wage Type Reports
The ‘X’ in the report name stands for an international report.
Eg:- “D” stands for Germany and “U” stands for U.S.A
Results are stored in ‘Clusters’.
To view results: –
Pay roll International Tools Display results
Remuneration Statement : –
Remuneration statement is usually created after payroll run, but before payment is effected.
Payroll Account :
Contains tables payroll data for are more employees for one or more periods. A payroll account is usually created at the end of the year. (Employee specific)
HR Payroll India Information systems Employee Payroll Account.
Contains payroll data for several employees for one period. A payroll journal is usually created at the end of the period .
HR PayrollIndia Information systems organizational system Payroll Journal.
Wage Type Statement :
This enable you to cumulate and sort wage types from payroll results according to various organizational criteria. The evaluation shoes the current wage type values (number and amount) for a specific period.
HR Payroll India Info Systems wage Types wage Type Statement.
Wage Type Distribution:
Evaluate wage types for more than are period. You can display the progression & individual or several wage types over several periods.
HR Payroll IndiaInfo Systems Wage Types Wage type Distribution.
Wage Type Reporter:
Flexible tool for wage type evaluation. You can display wage types for a specific period within period or for period views.
HR Payroll India Info Systems wage Types wage type Reports.
Period parameters :
Period parameter determines whether payroll is run monthly, bi- monthly, weekly etc.,
Period parameter is assigned to Payroll Area.
Data Modifies :
Additional day types. These are used to store the pay dates.
Eg: Payroll run monthly you want payment dates for pensioners to 1st of the month, for industrial workers the 15th, for salaried the 25th then date modifies can be
Date Modifies Text
01 – Payment Date on 1st
02 – Payment Date on 15th
03 – Payment Date on 25th
Date Modifies should be assigned to payroll area.
SAP HR uses Payroll area to group together employees for whom payroll is run at the same time. Employees from different subgroups can belong to one payroll area.
Eg: Payroll Area Period parameters Date Modifies
AB – 01- Monthly – 01
AC – 02- Weekly – 02
A payroll period determines the period for which a payroll result is created.
Eg: Month, week, fourteen days, it gives information like the payroll results being to which payroll year data end period.
5. Calendar for Cumulations:-
- Cumulation of wage types for reporting purpose.
- A calendar must be generated for each contribution of ‘Period parameter’ and ‘date Modifies’.
Pay day Rule / No. of Days :
These two are used to determine hoe the period payday is calculated
The following values can be used for the payday rule.
The No.of days is added to the start date of the period to calculate the payday.
The No.of is deducted from the end date of the period
The no.of days is added to the end date of the period
Only applies to monthly periods, the number is used as the exact date.
7. Determine Period Numbers: –
- In this field you determine / define which date of the payroll period the system used to determine the period number. The system uses the period number in the payroll control record to increase the payroll periods sequentially for a year.
- With every new tax year the period number is rest to one.
Generate Payroll Periods : -Wweekly Payroll Periods
Period parameters – 03 (Weekly)
Date Modifies –
Start date – 01.07.2001
End year – 2002
Start of Tax year – 0101
Pay day Rule – 3
Number of days – 5
Determine Period Numbers –
In this example, the employee is paid each Thursday for the proceeding week. (Start date 02.07.2001. Sunday – Saturday period)
Reason:- The Payday rule 3 says that the number of days (5) is added to the end date of the period.
Employee sub group grouping for Personnel Calculation Rule (PCR) and collective agreement Provision (CAP):
This grouping will allow reassigning different employees to differences pay scale groups.
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Standard SAP groupings are
- Pay scale employee/ Hourly wage 1
- Pay scale employee / Monthly wage 2
- Pay scale employee/ Salaried 3
- Non-Pay scale employee 4
Employee sub group grouping for PCR is required in Payroll Accounting employee sub group grouping for CAP is required for indirect valuation fo wage types in basic pay infotype (0008).
It is used to define pay scale groups and levels within the grouping for each payscale type and areas.
PAY SCALE STRUCTURE:
Pay scale structure is defined by following elements:
- Pay scale Type
- Pay scale Area
- Pay scale group
- Pay scale level
Pay scale Structure :
Pay scales structure covers pay aspects which are dependent, for example, on regional, industry – specific financial and frame – related factors.
Pay scale type :
A pay scale type describes the validity for a pay scale or a collective agreement. A collective agreement is usually valid for industry sector – 2 Character key
Eg: Metal Industry Chemical Industry
Pay scale Area:
Pay scale area represents the geographical region to which a pay scale or collective agreement applies – 2 character key.
Eg: Pay scale area for Hyderabad in metal industry – MH
Pay scale area for I Chennai in metal industry – MC
Pay scale area for Bangalore in metal industry – MB
Pay scale Group:
Pay scale groups generally represent the job grades in an organization.
Eg: Top Management Senior Management
Pay scale Level:
Pay scale levels are subdivisions of pay scale groups they refer to the notices that the employee is on within his pay scale group.
Assignment of Pay Scale Type / Area to personnel Subarea:
You have to assign the pay scale types and pay scale area to the personnel sub areas.
Eg: Per. Area Per. Sub. Area Pay scale Area Pay scale Type
India Hyd MH M1
India Chennai MC M1
India Blore MB M1
Default Pay scale data – Feature Tariff:-
Feature ‘TARIF” is used to default Pay scale data i.e., Pay scale type and Pay scale Area in the Basic Pay infotype [1T 0008]
Eg: MH & M1 defaulted in basic Pay infotype 0008 of the employee belonging to Hyderabad.
Wage Type Structure: –
- Setting up wage types
- Copying wage types
- Permissibility of wage types for specific info types and employee subgroups / personal sub area.
- Wage type characteristics
- Dialog characteristics
- Indirect valuation
- Default wage Types
- Wage Types
- Wage types are the key elements in the wage type structures.
- Wage types are used to assign payments and deductions as well as to control the Payroll program.
Setting up Wage Types:
- Step – 1 – Dialog Characteristics
- How wage types behave when they are entered into infotype
- Modification required to meet customer specific requirement
- Difference : primary and secondary wage types
- Step – 2 – Wage Type valuation
- Processing in Payroll
- Modification required to meet customer specific requirement
- Wage types are processed according to a set of rules assigned to the wage type valuation.
- The Payroll driver is told how to process the wage type based on the characteristics assigned to it
- Wage types – Categories
Two Main categories
- Primary or Dialog wage Types
- Secondary or Technical wage types
- Primary or Dialog wage types :
- Each individual company defines the primary or dialog wage types so that they can depict the company specific payroll requirements.
- The SAP system contains examples of primary / dialog wage type in a sample wage type catalog.Eg: MAIO – Standard / Basic PayCharacteristics are generally pre-defined for there wage types.Eg: Wage type Group – 0008 Basic Pay.
- Wage type Groups:
- SAP uses the wage type group concept to group wage types that have similar characteristics with regard to payroll.
- Secondary or technical wage Types:
- These are easily recognized as they have slash (/) as the first character.
- Characteristics are not defined for there wage types, as the system defines their values during payroll processing.
- These wage types are not part of the employees’master data.
PROCESS FLOW FOR PAYROLL:
- Displaying and Maintaining information types (Infotypes) relevant to payroll
- Executing a Payroll run
- Checking the Payroll Results
- Correcting the Payroll Results
- Displaying the Remuneration statement
- Creating the remuneration statement
- Ending the Payroll
- Transferring the Payroll results to FI / CO.
- Displaying and Maintaining Infotypes: –
All the relevant infotypes –
0000 – Actions
0003 – Payroll Status
This infotype is already discussed in detail.
0007 – Planned Working Time
Calculation of salary is based on work schedule attached to the employee. In this infotype we get the info relating to the number of working hours of an employee per day, per week, working days per week, working hours per month, working hour per annum and also the holidays per annum.
0008 – Basic Pay
0009 – Bank Details
0014 – Recurring Payments & Deductions
This infotype allows you to pay/deduct amounts which are recurring in nature.
0015 – Additional Payments
This infotype allows you to pay/deduct amounts which are non recurring in nature
Must be maintained which are relevant for the payroll
-When payroll periods are counted in the control record, simulation runs are ignored. Furthermore, simulation runs do not lock master data. You are not required to use the Release Payroll and Exit Payroll functions when simulating a payroll run. The results of a simulated payroll run are not written to the database. Instead, they are displayed in the payroll log.
-Simulating a payroll run enables you to display and print the remuneration statement.
Executing a Payroll Run:
You must release a payroll run before executing it then the payroll run can take place.
-The personnel numbers to be included in the payroll run are selected by specifying a payroll area in the payroll driver selection screen. The payroll period is transferred directly from the payroll control record to the payroll program.
-In a live run, the payroll period is determined by the system. The last period to be included in a payroll run is stored in the payroll control record for each payroll area. The current payroll period is, therefore, the last period to be included in a payroll run, plus one.
Hint: Payroll driver should be started by Personnel Number or Payroll Area only
The payroll log has a table of contents in the form of a tree structure. You can access specific detailed information from the nodes in the tree structure. Detailed headers enable you to search successfully for errors and facilitate navigation within the log information. If required, you can show or hide individual tree structure nodes.
Menu: – HR → Payroll → India → Release Payroll
T Code : – PC00 _ M99 _ PA03 _ RELEA
After releasing the payroll run. You should execute the payroll run.
Menu:-HR → Payroll → India → Start Payroll
T Code:-PC00_ M01_CALC
Payroll log will be displayed after the execution of the payroll.
Checking the Payroll results
Here you can check the payroll results
Menu:-HR → Payroll → India→ Check results
T Code:-PC _ PAYRESULT
Correcting the Payroll results
When checking the payroll results you discovered that a person didn’t receive enough remuneration. Now to correct that you need to go to this function.
Menu:-HR → Payroll → India →Release for correction
Displaying the remuneration Statement:
You can display the remuneration statement using this
T Code:- PC00_ M01_ CALC
Creating the remuneration statement
Remuneration statement refers to the pay slip which the employee receives periodically.
Menu:-HR → Payroll →India →Remuneration statement
T Code:- PC00 – M01 – CEDT
When you do this, the payroll will be ended for the current period of the payroll run. You can only make corrections for this period by carrying out retroactive accounting in the subsequent period.
Menu:- HR → Payroll →India → Exit Payroll
T Code:- PC00_ M99_ PA03 _ END.
8. Transferring the payroll results to FI/CO:
The results should be transferred to the FI/CO to get them credited to employees.
Payroll posting groups the payroll results that are relevant for Accounting into documents, and posts them to the Accounting components posting usually takes place once each payroll period. When the results are posted to Accounting, all posting information is selected from the payroll results, summarized, formatted and posted to the integrated accounting component.
Each employee’s payroll result contains different wage types that are relevant to Accounting.
Wage types to Expense Account:-
Wage types such as standard salary, bonuses and over time represent expenses for the company. Which are posted to a corresponding expenses account.
Wage types posted to Payable Account:-
Wage types such as bank transfers, transfer of capital formation savings payment, employment tax, employee’s contribution to social insurance and so on are employer’s payable to the employee or others and so on and are posted as credits to a corresponding payable account.
Wage types posted as expense as well as Payment:-
Wage types such as the employee’s Health Insurance contribution, which represents an expense for the enterprise and, at the same time, a payable to the social insurance agency. For this reason, such wage types are posted to two accounts once debited as an expense and also credited as a payable.
- Create Documents
- Check Documents
Delete documents or post additional employees, if required.
- Release Documents
Double-click a line to view background information if required.
- Post documents
- Check Completeness.
Create Posting Run:-
‘Create Posting Run’ step evaluates the payroll results in a live run and
- Creates a posting run
- Creates posting documents
- Selects the employees evaluated
HR → Payroll→ International → Subsequent Activities → Per Payroll period → Posting to Accounting → Create posting Run. [If you are using International Payroll version, if not then you have to go to the selective country version to get this posting process executed]
In the selection screen of the ‘Create Posting Run’ fill the following:
Enter the payroll area and the period:-
The sequence of evaluations for posting to accounting should correspond to the sequence of payroll periods.
Document Creation Section:-
In this selection, specify that you want to create a posting document for a live posting run. Here you differentiate between ‘Live’ and ‘simulation’ runs.
You can only run a live posting run once per personnel number and per payroll period. If you want to repeat a live posting run, you must first delete the existing run.
Specify Posting date: –
Information required for creation of the documents
Enter a Posting variant:-
You create posting variants in ‘Customising’ for reporting for Posting Payroll results to accounting.
Posting Run Log:-
The log displays the processed personnel numbers and statistics; if required, the tree can be expanded to display detailed information.
“Document Overview” pushbutton should be pressed to access the document overview screen.
Payment amounts must be transferred from the company bank account to the employee bank account.
Data entered in the Bank Details infotype (0009) determines whether a ‘Cheque’ or ‘bank’ transfer is generated. The Payment method field determine whether payment is made by cheque – ‘C’ or bank transfer – ‘U’ subtype 0 contains the main bank details.
Subtype 1 is used for additional Bank details. An employee must specify the percentage of the salary if he/she wants to distribute his or her salary between different banks.
Overview: Bank Transfer and Cheque Printing
Preliminary program for Data Medium exchange [DME] generates temporary dataset that is used as input for the Data Medium exchange program. This report creates a file that complies with the banking regulations for DME by click and contains all payment information.
HR → Payroll → Country → Payroll → Bank transfer → Pre Program DME.
A bank transfer is generated in two steps: –
- Pre-program DME
- Bank transfer → DME
- When you run Pre- Program DME, note the number of the file created. It is advantageous to note the date.
- The program used to generate ‘Bank transfer’ is country-specific and is not available for every country. You find it in the SAP menu for payroll for you country under the area. Bank transfer to start the DME you must enter the number and date of the previously created file (Preliminary program for DME).
Off- Cycle Payroll:
Off-Cycle Payroll function is used to run payroll for employee not included in Payroll run. The payroll control record is not taken into consideration in off-cycle payroll.
US PAYROLL OVERVIEW:
Tax Authority identifies a government agency that is authorized to levy certain taxes. Depending upon the jurisdiction of the agency, the level of the tax authority may be:
- State [E.g. Washington]
- County [E.g. King]
- City [E.g. Seattle]
- School District
The type of the tax to be levied by the authority
E.g. Withholding, Unemployment etc.
Resident Tax Area:
The employee’s residence for tax purposes. It is used to derive the tax authorities which will levy taxes that apply to residents.
Work Tax Area:
The work tax area is a code of up to four characters that defines the group of tax authorities for a given work location.
US Tax Related Infotypes:
- Employee tax information is used by the payroll system to calculate the tax an employee is liable to pay and the amount the employer must contribute to federal, state and local tax, as well as unemployment insurance. The following data should be available for the proper calculation of withholdings:
Address (Infotype 0006) – This is used as a suggested default for the residence tax area.
Residence Tax Area (Infotype 0207) –
The residence tax area is the group of authorities to which an individual employee pays tax.
Work Tax Area (Infotype (Infotype 0208) –
Only required if employee works in multiple states.
An employee, who works in more than one locality during a tax year, may be subject to taxes in those localities. The Work Tax Area infotype records the amount of time an employee spends in each locality other than their Residence Tax Area (Infotype 0207) throughout the tax period.
Unemployment State (Info type 0209) –
Only required if employee works in a state that is not the residence state.
Unemployment state information is used for the payment of Unemployment Insurance for each employee. You should create Unemployment State records in accordance with company policies and the applicable state laws.
This information is also used to provide statistical information to unemployment authorities requiring multiple work site reports
Withholding Information (Info type 0210) –
Federal and State if required.
This infotype is used to store the details from an employee’s Federal Employee Withholding Allowance Certificates (Form W-4) and from the employee’s equivalent state and local Withholding Allowance Certificates, if applicable. The information stored on Infotype 0210 is used together with the information in Infotype 0234 Withholding Overrides and Infotype 0161 IRS Mandates to calculate withholding tax for an employee.
Additional Withholding Information (Infotype 0234) –
Calculate withholdings from special payments.
The information entered for an employee here is used in conjunction with the employee’s W-4 Withholding Information (Infotype 0210) to calculate withholding taxes for the employee
Payroll uses the information on Infotype 0234 to calculate withholdings from special payments. The type of supplemental method to be used to calculate the tax is also likely to differ with each payment. For this reason it may be advisable to create a new record for each payment.
Other Taxes (Infotype 0235) –
Alternatives to standard calculation of taxes for an employee.
In certain exceptional circumstances it may be necessary to record alternatives to the standard calculation of taxes for an employee.
The Other taxes (Infotype 0235) record may be used for any tax authority.
IRS Mandates (Infotype 0161) –
An employee may have limits on exemption amounts set by the Internal Revenue Service (IRS) or another tax authority. The IRS Mandates infotype ensures that the system will not allow an employee to claim more allowances or withholdings than the IRS or the relevant tax authority has deemed appropriate for that individual. You should maintain the IRS Mandates infotype with any data provided by the relevant authority.
This component enables you to produce payroll tax and other reports for government authorities in the format required by each authority.
Tax Reporter is the component of SAP Payroll that enables you to produce quarterly and annual wage and tax reports for local, state, and federal tax authorities.
Tax Reporter generates the following documents:
- Form 940 – Employer’s Annual Federal Unemployment Tax Return
- Form 941 – Employer’s Quarterly Federal Tax Return
- Form 941C
- Form W-2 – Wage and Tax Statement
- Form W-2C
- 1099-R – Distribution from Pension
- Multiple Worksite Report (Combined format for Bureau of Labor Statistics)
- Unemployment Insurance reports for all states
W2 Form Employers are required by the IRS to issue a W2 form for each employee before February 28. The W2 form lists the employee’s wages and tax withheld.
A Correction W–2 is an adjusted version of the employee copy of Form W–2, and can be generated before tax forms are filed with tax authorities.
Before you file your W–2s with the relevant tax authorities, Tax Reporter allows you to generate Correction W–2s for employees whose wage and tax information is adjusted after the W–2 employee copies have been distributed. “Correction” is printed on the face of Correction W-2s to differentiate these forms from the incorrect originals.
INDIAN PAYROLL OVERVIEW:
SAP has introduced a separate Payroll Schema for India which is IN00. This schema contains the coding which meets the norms of India Statutory Law in case of Employee Deductions like PF, ESI etc.
And also there are certain wage types which are specific to Indian Payroll and they are listed below:
IT 0580: Previous Employment Tax:
IT 0581: Housing [HRA/CLA/COA]:
This infotype allows you to enter the details for housing of the employees.
This infotype also captures any helpers or furniture provided with the accommodation, which are to be added to the taxable value.
IT 0582: Exemptions:
This infotype allows you to enter LTA exemptions, Medical Exemptions, Exemption on Child Education and Child Hostel Allowance, etc.
The following screen shot tells you how to create a record of LTA exemption:
IT 0583: Car and Conveyance:
This infotype stores for an employee the details of the:
-Car and driver for the different Car Schemes.
IT 0584: Income from Other Sources:
This infotype stores the details of income from sources other than that from your employment, for the current financial year so that tax can be computed accordingly.
There are two subtypes to this infotype:
-Subtype 0001 – Income From House Property
-Subtype 0002 – Income From Other Sources
IT 0585:Section 80 Deductions:
This infotype keeps a record of the proposed and actual contributions made by an employee towards Section 80 subsections and divisions.
IT 0586:Section 88- Investment Details:
This infotype keeps a record of the proposed and actual investments made by an employee towards Section 88.
IT 0587:Provident Fund Contribution:
This object stores the Provident Fund information of an employee.
IT 0588:Other Statutory Deduction:
Here we can store the details of other statutory deductions. And this infotype will have subtype like:
Employee State Insurance
Labour Welfare Fund
IT 0589:Individual Reimbursement:
IT 0590:Long Term Reimbursement:
Use the Long Term Reimbursements Infotype (0590) to maintain details of the Long Term Reimbursements claimed by your employees.
This infotype has the following subtypes:
SHFS: Use this subtype to capture details for Hard Furnishing schemes claimed by your employees. You create this subtype when an employee acquires an asset for the first time under a Hard Furnishing Scheme. You must create the record for the dates between the acquiring date and the fixed block End Date. Also mention the Asset code, a description of the asset and the Asset Value. The subtype by default, displays the fixed end date for a Hard Furnishing Scheme.
SSFS: Use this subtype to capture details for Soft Furnishing Schemes. You create this subtype when an employee acquires an asset for the first time under a Soft Furnishing scheme. You must enter a description of the Asset, the Perk percentage and the Asset value in this subtype.
SCAR: Use this subtype to capture details of the Car Maintenance Scheme. You create this subtype when an employee submits a claim for the first time under a Car Maintenance Scheme. In this subtype, you enter a description of the Car Maintenance Scheme and the amount.
IT 0591: Nominations:
This infotype stores the nomination details of employees for the following benefits:
-Employee State Insurance
The following options have been added to the Conditions tab of the Loans Infotype (0045) for India:
- Penal Interest Simulation
- Tranche – You can select this option to display the Proposed Disbursement Plan (as per configuration) of the loan grouping for the employee.
When you select this option, the system reads and displays data from the table views Loans Disbursement Schedule (V_T7INJ5) and Loan Tranche Disbursement: Text for Event Codes (V_T7INJ6).
- Penal Interest Simulation – You can select this option to simulate the Penal Interest Amount for the current period, if you have entered a Special Repayment Amount under the Payments
When you select this option, the system calls the Batch Program for Penal Interest (Loans) Report (HINILON0) in the simulation mode, to calculate the Penal Interest Amount for the current period for the employee.
PAYROLL REPORTS- INDIA:
Few Important Reports used in Indian Payroll are:
This function enables you to print for a financial year, for an employee, the following sections of Form 16:
- Details of Salary Paid and Any Other Income and Tax Deducted
This section displays the income, deductions and tax details of the employee for the financial year.
- Details of Tax Deducted and Deposited into Central Government Account
This section displays the:
¡ Amount of Tax Deducted
¡ Date of Remittance
¡ Name of the bank and the Branch where the tax is deposited.
The two sections mentioned above form the main part of Form 16. The following two reports are also printed along with Form 16:
- Annexure to Form No. 16
This report displays, the amounts for the different components of:
¡ Emoluments Paid
¡ Income from Other Sources declared by the employee and processed in the payroll runs
¡ Exemptions u/s 10
- Form No. 12BA
This report is a statement showing particulars of:
¡ Other fringe benefits or amenities
¡ Profits in lieu of salary
A copy of the Form 16 is given to the employee by the employer at the end of the financial year or on termination of the employee.
- Multiple Form 16
If you have implemented the SAP Payroll across a group of companies, you can issue separate Form 16 to an employee for the period of his/her employment in each of these companies.
If you are already live with the SAP Payroll, you can enable Multiple Form 16 from the beginning of the financial year, example, from April 1, 2002.
Once you have enabled Multiple Form 16, you should not revert it.
If an employee has been with the same group for discontinuous periods in the same financial year, the employee will get a separate Form 16 for each continuous employment with a Group. For example, an employee has been with:
¡ Group 1 of ABC between April 1, 2001 – July 31, 2001
¡ Group 2 of ABC between August 1, 2001 – December 31, 2001
¡ Group 1 of ABC between January 1, 2002 – March 31, 2002.
In this case, the employee will get three separate Form 16, two from Group 1 and one from Group 2.
The report reads the:
- PAN/GIR Number of the employee from the Personal Ids Infotype (0185) 0002
- PAN Number, TAN and the GIR of the employer through the Feature to return Employer ITax related data (40ECC). To configure this feature, go to the IMG under Payroll India ® Tax ® Basic Settings ® Maintain Feature to Return Employer IncomeTax Related Data.
- TDS Circle address from the table view Personnel Subarea grouping for Tax (V_T7INT5).
This function enables you to print, for the selected employees, the following parts of Form 24:
- Details of Salary Paid and Tax Deducted thereon from the Employee
This part displays the income, deductions and tax details of the selected employees for the financial year.
The annexure displays the particulars of perquisites and amount of accretion to Employee’s Provident Fund Account for the financial year.
- A copy of Form 24 has to be submitted by the employer to the tax office before May 31 for the preceding financial year, example, before May 31, 2002 for the financial year 2001 – 2002.
- If you have implemented the SAP Payroll across a group of companies, and you have employees who have worked in more than one of these companies within a financial year, you can list their details for the period of his/her employment in the Form 24 of each of these companies. This happens only when you enable Multiple Form 16.
If an employee has been with a Group for discontinuous periods, in the same financial year, the employee will be listed in Form 24 of the Group for each continuous employment with the Group. For example, an employee has been with:
¡ Group 1 of ABC between April 1, 2001 – July 31, 2001
¡ Group 2 of ABC between August 1, 2001 – December 31, 2001
¡ Group 1 of ABC between January 1, 2002 – March 31, 2002
In this case, the employee will be listed twice in the Form 24 of Group 1 and once in the Form 24 of Group 2
Professional Tax Report: [HINCPTX0]
This function enables the display and printing of professional tax returns. The system generates the professional tax returns that your company needs to submisst to the state authorities, while remitting the professional tax deductions of the employees.
Before you generate a professional tax report, you must:
- Create Other Statutory Deductions Infotype (0588) and PTX (Professional Tax Eligibility) subtype (0003). In this infotype, you must select the PTax eligibility option for an employee.
- Have the professional tax results for at least one payroll period.
Form 6 and 7 for Employees’ State Insurance Report: [HINCESI0]
This function prints the following statutory forms for Employee State Insurance:
- Form 6
- Form 7
This report reads the Results Table and the Other Statutory Deductions Infotype (0588) Subtype ESI (0001) for details to be printed on the forms.
- Other Statutory Deductions Infotype (0588) Subtype ESI (0001) records must exist for the selected employees.
- ESI wage types must exist for the selected employees in the Results Table, for the selected contribution period.
Labour Welfare Fund Legal Reports: [HINCLWF1]
This function generates the legal forms for the Labour Welfare Fund (LWF) contributions. The layout of the forms and of the information provided therein differs from state to state.
For example, the LWF form for the State of Tamil Nadu differs from that of Karnataka or Maharashtra.
For the required employee(s), you have selected the Contributing to LWF indicator in the Other Statutory Deductions Infotype (0588) LWF Subtype (0002).
Gratuity Listing Report: [HINCGRY0]
This function generates a Gratuity List for a selected employee range, within a specified gratuity period. This is a non-statutory report.
- You have maintained the Personal IDs Infotype (0185) Gratuity for IndiaSubtype (03).
- You have processed the payroll for the required period and have payroll results.
The function generates a Gratuity List, providing gratuity information on an individual employee level. For a Gratuity Trust ID and a selected range of Personnel Numbers, the list displays the:
- Name of the employee
- Gross salary of the employee
- Contribution made by the employer towards employee gratuity
Superannuation Report: [HINCSAN0]
This function generates a Superannuation List for selected employees, within a specified period. This is a non-statutory report.
- You have maintained the Personal IDs Infotype (0185) Superannuation for India Subtype (01)
- You have processed the payroll for the required period and have payroll results.
The function generates a Superannuation List, which provides information on an individual employee level. For a selected Superannuation Trust ID and a range of Personnel Numbers, the list displays the
- Name of the employee
- Gross salary of the employee
- Superannuation contribution made by the employer towards each employee.
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