Payroll India (PY-IN)
Purpose
This component enables the running of the payroll for all employees in line with Indian legal and business requirements.
Implementation Considerations
The SAP HRPayroll India component must be implemented in cooperation with project teams implementing other areas of SAPHuman Resources (HR), in particular SAP HRPersonnel Administration.
Integration
The SAP HRPayroll India component integrates with other SAP HR components such as Personnel Administration and Personnel Time Management. There are interfaces to Financial Accounting and Controlling. You can run payroll using a combination of SAP and third-party products.
Features
The component uses data from other areas of SAP HR for calculating all statutory and non-statutory additions and deductions for your employees. SAP HR PayrollIndia offers a number of standard reports used in payroll, superannuation, leave, advance payments and taxation.
In addition to the standard payroll functions, the payroll processing for India also comprises the following country-specific functions:
Indirect Evaluation
Basic Increments
Dearness Allowance
Housing
Car and Conveyance
Long Term Reimbursements
Claims
Bonus
Income Tax
- Section 80
- Section 89(1)
- Third Party Deductions
- Income from Other Sources
- Tax on Arrears
Exemptions
Exemption on Leave Travel Allowance
Exemption on Medical Reimbursements
Exemption on Medical Insurance
Exemption on Child Education Allowance
Exemption on Child Hostel Allowance
Exemption on Other Allowances and Reimbursements
Exemption on Leave Encashment
Exemption on Voluntary Retirement Scheme
Previous Employment Tax Details
Professional Tax
Provident Fund
Employee State Insurance
Labour Welfare Fund
Nominations
Minimum Net Pay
Recovery of Rounding off Amounts
Loans Enhancement
One Day Salary Deduction
Mid Year Go Live
Termination Work Bench
Gratuity
Superannuation
Form 24
Form 16
Form 217(A)
SAP HR PayrollIndia supports retroactive accounting. This function automatically recalculates payroll in the event of changes to master data and time data in periods for which payroll has already been completed
Indirect Evaluation (INVAL) and 40ECS Feature
Purpose
Indirect Evaluation is a method to calculate the eligible amounts for some of the wage types. INVAL is the Indirect Evaluation Module used to meet the Indian specific business requirements. INVAL calculates the eligible amounts for certain wage types that are defaulted into the Basic Pay infotype (0008) or entered in the Recur. Payments/Deductions infotype (0014) and the Additional Payments infotype (0015).
When you populate the Long term reimbursements infotype (0590), the infotype checks the INVAL amounts for eligibility. The Claims programs also check the INVAL amounts while processing claims.
In addition to, or instead of, computing the eligibility as a currency value amount, INVAL can also calculate the eligibility in terms of numbers, if the wage type has been configured accordingly. For example, an employee can be eligible for 50 liters of petrol.
When you are populating the Basic Pay infotype (0008), the wage types get defaulted into the infotype depending on the Pay Scale Grouping for Allowances of the employee. Pay Scale Grouping for Allowances determines the eligible wage types for the employee. For some of these wage types, which get defaulted into the Basic Pay infotype (0008), the eligible amounts also get defaulted. This happens due to Indirect Evaluation Module INVAL.
For Recur. Payments/Deductions infotype (0014) and Additional Payments infotype (0015), if you enter an INVAL wage type, the eligible amount will get defaulted into the infotype. This is also due to Indirect Evaluation.
In case of Basic Pay infotype (0008), Recur. Payments/Deductions infotype (0014) and Additional Payments infotype (0015), if you overwrite the Indirectly Evaluated amounts, the amounts entered by you are valid. In this case, the indicator for indirect evaluation will get cleared. Again, if you delete this overwritten amount, the default amount and the indicator for indirect evaluation will get selected. The INVAL amount for a default wage type for an employee may change in the middle of the year. In this case, you can check the eligibility amount on a particular date, by entering that date as the start date of the Indirect Evaluation field at the bottom of the Basic Pay infotype (0008).
There are four module variants for INVAL:
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1.A – This calculates the value of the wage type as a fixed amount.
2.B – This calculates the amount as a percentage of a base wage type added to a fixed amount. More than one such amount, with same or different percentage of the base wage type, can be calculated for an INVAL wage type. In this case, the amount that will be Indirectly Evaluated will be the sum of all such calculated amounts, added to a fixed amount. For example, for the wage type M230, the different INVAL B amounts are:
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a.10% of MB10
b.30% of M220
c.Fixed amount of Rs.1000
In this case, the INVAL amount for the wage type M230 will be the sum of a, b and c.
3.C – This calculates the amount as a percentage of a base wage type subject to a maximum limit. More than one such amount, with same or different percentage of the base wage type, can be calculated for an INVAL wage type. In this case, the amount that will be Indirectly Evaluated will be the sum of all such calculated amounts, subject to a maximum limit. For example, for the wage type M230, the different INVAL C amounts are:
...
a.10% of MB10
b.30% of M220
c.Limit of Rs.5000
In this case, the INVAL amount for the wage type M230 will be the sum of a and b subject to a maximum of c.
4.D – This calculates the amount as one or any combination of the following INVAL Module variants based on Basic salary slabs:
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a.Fixed amount
b.Percentage of a base wage type added to a fixed amount
c.Percentage of a base wage type subject to a maximum limit
In the SAP system, INVAL D can be configured as only INVAL B or C. Once the percentage of the base wage type is calculated, the result is multiplied with a factor. This resultant amount is then added to fixed amount or is compared with a maximum limit. For example, the INVAL module variant for the wage type M210, for an employee who falls in the Basic Salary slab of Rs.10,000 – 12,000, is INVAL C. The INVAL amounts are:
i.10% of MB10
ii.30% of M220
iii.Multiplication factor of 50%
iv.Limit of Rs.7000
In this case, the INVAL amount for M210 for the employee is the sum of i and ii, multiplied by iii and the result is subject to a maximum of iv.
If you want to configure the wage type as a fixed amount for a particular slab, the wage type is configured as INVAL B. In this case, the percentage of the base wage type is multiplied with the factor of 0% and then the fixed amount added to the result. For example, the INVAL module variant for the wage type M230, for an employee who falls in the Basic Salary slab of Rs.15,000 – 25,000, is INVAL B. The INVAL amounts are:
- i.100% of MB10
- ii.Multiplication factor of 0%
- iii.Fixed amount of Rs.5000
In this case, the INVAL amount for M230 for the employee is the value of i, multiplied by ii and the result added to iii. In this case, the INVAL amount will be the fixed amount of Rs.5000.
For defining INVAL D, instead of using only the Basic Salary to be compared with the salary slabs, you can use the user exit EXIT_SAPLHRPADINA1_006, available in the Enhancement HRINRAP5, to define additional wage types to be added to the Basic Salary. The sum of all these wage types can then be compared with the salary slabs for the computation of INVAL D.
The base wage type in case of INVAL B, C or D may be the Basic Salary, the Dearness Allowance or/and any other wage type the employee is eligible for.
Only those factors, which affect the compensation of the majority of employees are assigned to Pay Scale Grouping for Allowances. There are some compensation factors that affect selected employees only. These compensation factors are not considered to define the Pay Scale Grouping for Allowances. These pay parameters are configured through the Feature to determine the eligibility for RAPs Feature (40ECS). Example of such parameters are, number of dependents, marital status, years of experience in the organization.
Only the wage types that are Indirectly Evaluated can be further calculated using the 40ECS feature. This feature determines the factor which is multiplied with the INVAL amount to arrive at the amount payable to the employee. For an employee, a wage type may be evaluated using INVAL. But the same wage type may be configured in the 40ECS Feature for the employee. In this case, the factor returned by the 40ECS Feature will be multiplied with the INVAL amount and the total will be defaulted into the respective infotypes. For example, an employee is eligible for a Leave Travel Allowance of Rs.24000 according to Indirect Evaluation. But you can configure the 40ECS feature, so that an employee who has children will get 25% extra for each child for a maximum of two children.
Implementation Considerations
If you want Indirect Evaluation for a wage type, you have to define it as a characteristic of the wage type. To do this, go to the IMG under Payroll India: Reimbursements, Allowances and Perks Maintain Wage Type Characteristics.
You have to maintain each INVAL wage type for a Pay Scale Grouping for Allowances in the IMG for Payroll India: Reimbursements, Allowances and Perks Calculate Eligibility for RAPs.
If you want the payroll to check the 40ECS Feature to determine the eligible amount for a particular wage type, you must configure the wage type in the IMG under Payroll India: Reimbursements, Allowances and Perks Calculate Eligibility for RAPs.
Integration
In case of SAP GUI
Defaulting and Indirect Evaluation for the Housing (HRA / CLA / COA) and Conveyance wage types happen only when you populate and save the respective infotypes – Housing (HRA / CLA / COA) infotype (0581) and Car & Conveyance infotype (0583).
Features
The important pay parameters that can be configured through the 40ECS feature are:
Number of children for children education allowance
Number of children for children hostel allowance
In case of these parameters, you also have to configure the relevant wage types in the IMG under Payroll India: Reimbursements, Allowances and Perks Calculate Eligibility for RAPs. In this table view, you must select Check for Ee characteristics in the Elig Check field. Whether a child is eligible for Child Education Allowance or for Child Hostel Allowance, or whether a dependent is eligible for any other allowance, is entered in the Family/Related Person infotype (0021). The 40ECS feature checks this infotype and accordingly calculates an eligibility amount for each of the allowances for each employee.
The other parameters that can be configured through the 40ECS feature are:
Country Grouping
Company Code
Payscale Grouping for Allowances
Wage Type
Job
Gender Key
Marital status key
Region (State, Province, County)
Personnel Number
Start date
Constraints
Indirect Evaluation requires that the base wage type, on which the evaluation of any other wage type depends, should have been evaluated previously. For example, wage types MB10 and M230 are evaluated indirectly and M230 is evaluated as a percentage of MB10. Then, it is required that MB10 be evaluated prior to M230 in the Basic Pay infotype (0008).
See also:
Indirect Evaluation and 40ECS Feature Definition
Pay Scale Grouping for Allowances
Basic - General Increments Report (HINIBSG0)
Use
This function is used to perform a batch update of increments in the Basic Salary wage type in the Basic Pay infotype (0008).
Prerequisites
You must have maintained the IMG activities under Payroll IndiaBasic Salary for India.
Activities
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1.From SAP Easy Access menu, choose Human ResourcesPayrollAsia/PacificIndiaUtilitiesBasic General Increments.
The Basic - General Increments report screen appears.
2.Enter the Personnel number and Pay Scale Grouping for Allowances of the employees to whom you want to give increments in the Basic Salary.
3.Enter the date from which the increment has to be effective.
4.Enter the name of the batch session.
5.Choose ProgramExecute.
6.The system conducts the following eligibility checks:
a.The system checks the current Pay Scale Grouping for Allowances of the selected employees. If this Pay Scale Grouping for Allowances is not the same as that entered by you on the selection screen, the employee is rejected.
b.The system checks whether the increment Effective Date entered by you on the selection screen falls in the last split of the Basic Pay infotype (0008). If it does not, the employee is rejected.
c.Depending on the Pay Scale Grouping for Allowances of the employee, the system reads the Basic Salary and Personal Pay wage types of the employee from the table view Basic Wages (V_T7INB1). The system reads the Basic Pay infotype (0008) for the current value of Basic Salary and Personal Pay wage types.
d.Based on the current Pay Scale Grouping for Allowances of the employee, the system reads the Basic Code and the Method Type from the table view Basic Codes for Allowance Groups (V_T7INB5).
e.Based on the Basic Code and the Method Type, the system reads the table view Basic Slabs (V_T7INB7) for the salary slab in which the basic pay of the employee falls.
f.If the current basic pay of the employee is the greater than or equal to the upper limit of the highest slab, the employee is rejected.
g.If the current basic pay of the employee does not fall in any slab, the employee is rejected.
h.If the Method Type is Increment by Amount, the system adds the increment amount to the current basic pay to compute the new current basic pay.
i.If the Method Type is Increment by Percentage, the system reads the table view Basic Slabs (V_T7INB7) for the type of percentage method. Accordingly, the system calculates the new basic pay and adds it to the current basic pay to arrive at new current basic pay.
7.The list of employees eligible for the increment appears.
8.You have the following options on the output screen:
a.Increment - Select this option to process the increment for all the eligible employees. The system creates a batch session. You can execute this batch session to update the Basic Pay infotype (0008).
b.Ambiguous Cases - Select this option to display the ambiguous cases. For example, employees for whom the Effective Date that you have entered on the selection screen does not fall in the last split of the Basic Pay infotype (0008).
c.Errors - Select this option to display all error cases. For example, employees for whom the Pay Scale Grouping for Allowances is not the same as the one that you have entered on the selection screen.
The Ambiguous Cases and the Errors are for information only.
d.Download - Select this option to download the results in the desired format.
Dearness Allowance
Purpose
This component enables the computation of Dearness Allowance.
Dearness Allowance is a non-statutory allowance that you pay to an employee on a monthly basis. The payment of this allowance relates to the changes in the cost of living in a particular location. The Dearness Allowance is related to the Consumer Price Index (CPI) for a given location, and the state authorities generally revise the CPI on a quarterly basis.
A change in employee status, such as a transfer or a promotion, may affect Dearness Allowance. The allowance consists of a fixed and a variable portion.
For a non-management category, you generally call this component the Dearness Allowance. For a supervisory category, you may call it the Cost Of Living Allowance (COLA).
Integration
DA forms a part of the salary basis for the other components of Payroll India. For example, the Dearness Allowance along with the basic salary typically forms the salary basis for computation of:
Income Tax
Gratuity
Professional Tax
Features
Batch Program - DA (Report) (HINIDAB0)
This report computes the Dearness Allowance for a selected range of employees and generates a batch program. Upon execution, the batch program updates the Basic Pay infotype (0008) of the employees.
Dearness AllowanceComputations
The standard SAP system provides the following methods for the computation of Dearness Allowance:
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
You can configure the Dearness Allowance computation method through the IMG under Payroll IndiaDearness Allowance.
Housing
Purpose
This component helps you create and maintain information on the employee accommodation. You can also compute the exemptions and perquisites applicable on a housing benefit.
Integration
Income Tax
During the computation of the annual exemptions and perquisites, the Income Tax functionality also includes the exemptions and perquisite wage types of the housing functionality.
Basic Pay infotype (0008)
When you create or modify a housing record using the Housing(HRA / CLA / COA) infotype (0581), in case of SAP GUI, the system dynamically updates the Basic Pay infotype (0008) with the new or changed wage type for Housing.