Automate Period-Based Payments in the SAP Payroll System

  • by Irfan Malik, Senior SAP HCM Consultant, IBM Global Business Services
  • May 23, 2012
Learn how to use standard SAP payroll functionality to automate your business policies on the basis of monthly payroll periods.
Key Concept

Restricting execution of personnel calculation rules based on payroll periods is made easy by using standard SAP payroll operations. By employing this methodology, you can automate business policies based on payroll period constraints.

SAP payroll systems can perform period-based evaluations (i.e., on the basis of payroll periods). HR payroll departments are being asked to adapt to new business rules — such as policy changes in a country’s statutory regulations or internal departmental changes — while at the same time ensuring legal compliance. For example, changes to payroll processing logic could require a certain allowance or deduction or any kind of evaluation to be processed on the basis of payroll periods.

I show you how to handle these complex payroll processes and stay in compliance with current legal regulations through standard payroll operations. Before going into detail, however, I discuss some basics that you need to understand.

Payroll Accounting Area

A payroll accounting area is a logical group in the SAP payroll system that contains all the employees for whom the payroll runs at a certain time. The payroll accounting area also defines the frequency with which employees are paid. The parameter period determines how often payroll is run for a payroll accounting area. Each payroll accounting area is assigned one period parameter. Examples of standard parameter values are monthly, weekly, and biweekly.

Payroll Period

Payroll periods, on the other hand, are defined for each period parameter against every calendar year. Each period is numbered in ascending order, beginning with 01. In the case of salaried employees, these periods are usually months (i.e., January is payroll period 01, and May is payroll period 05). However, when a period parameter is weekly, then the total number of payroll periods depends on the total number of days in the current year. Using this method can result in a fluctuation in the number of days paid per payroll period. For example, there are usually 52 weekly payroll periods in a year. If you apply a similar technique in the case of a biweekly period parameter as you would use for monthly payroll, the result is a different total number of payroll periods (i.e., for bimonthly payroll there are usually 26 periods in a calendar year).

Irfan Malik

(Muhammad) Irfan Malik is a senior managing consultant at IBM Global Business Services in Pakistan and has been working as an SAP HR consultant for many years. He has consulted for various global, public, and private companies on their SAP HR core modules including Payroll and Time Management implementations.

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