A Simpler Method of Checking Part Period Factoring

  • by Titia Rijpma, Senior SAP HR/Payroll Consultant, Axon, Ltd.
  • December 15, 2007
Discover how to use your SAP system’s part period factoring capabilities to address an employee’s pay adjustment.
Key Concept

Part period factoring is SAP’s method of calculating an employee’s pay when a change has been made to the data that affects the way the system calculates his or her pay. You use part period factoring in several situations, including:

  • The employee has joined or left a company midway through the payroll period
  • The employee has had a change in working hours or a change in pay midway through a payroll period
  • The employee has taken an unpaid leave of absence

When an employee change occurs during a payroll period, whether it’s the employee joining or leaving a company or having a change in his or her pay, you need to make sure your SAP system correctly compensates the employee. SAP’s method of performing this is called part period factoring. This process is typically confusing to users and it is not well documented. Based on my experience, I’ll walk you through the necessary steps of part period factoring.

Starting with a full period’s pay, the system splits the payroll period into sections and individually calculates the pay the employee is due for each section. It compares the employee’s planned working time based on the standard work schedule to the number of hours actually worked to determine a factor, and then uses this to determine the pay the employee is due for each split.

When issues are logged with part period factoring, payroll users usually check the part period factoring calculated by the system through the payroll log and manually verify the calculation. I’ll show you which sections of the payroll log to check and then how to verify the system’s calculation independently. I created this example in SAP R/3 Enterprise (Release 4.7). However, this part of payroll does not significantly change between versions so the same logic applies in any release.

Part Period Factoring Example

To illustrate part period factoring, I’ll use the following scenario: An employee joined a company on 17.10.2006. The full monthly salary is £2,000. The system needs to calculate the pay the employee is due from 17.10.2006 to 31.10.2006. Because this is a new employee, he or she is not due any pay prior to 17.10.2006. As per the company handbook in my example, the company bases the portion of the salary the employee should receive on calendar days. While this example is based on calendar days, other factoring methods that are commonly used are based on working days or working hours.

Titia Rijpma

Titia Rijpma was trained to be a translator, translating from and into Dutch, English, and Russian. After her move from the Netherlands to the UK, she learned SAP technology and became an SAP consultant. In 2006, she began her focus on SAP HR and Payroll. Currently, Titia supports various customers across a broad range of industries and sectors.

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