Consolidate Small Paychecks with a Quick and Simple Business Process

  • by Steve Bogner, Managing Partner, Insight Consulting Partners
  • February 15, 2009
Learn how to configure a business process in SAP Payroll that automatically holds back small payments for employees until a specified minimum amount is reached. This configuration helps streamline the payroll process as a whole by consolidating multiple small paychecks into one larger check.
Key Concept

A minimum net pay payroll process is used by payroll departments that choose not to create paychecks for employees when the net pay is extremely low, such as small payments due to rounding differences or minor tax changes. Instead of creating paychecks for these small amounts, SAP Payroll can automatically hold back the net pay and accumulate it with future paychecks until the amount payable is greater than a certain minimum amount, at which point it is paid to the employee.

Have you ever wanted to have more control over issuing payments for very small amounts in your SAP Payroll system? Maybe you don’t want to print paychecks for such small amounts, but instead store up the net payable amount until it reaches a certain level — for example, you may only want to issue payments that exceed $1.00 in net pay. If so, standard SAP Payroll can support this business process.

Although the default configuration from SAP does not implement this process, it can be supported with some minimal additional configuration. I will explain how to configure your system to only distribute the net pay when it exceeds a certain minimum amount and then show you an example of this in action.

Configure Minimum Net Pay

You can use three basic steps for configuring minimum net payroll payments in SAP Payroll. First, decide the minimum amount of net pay that you want as a threshold. Next, map two wage types to the SAP General Ledger account that stores the net payable amount. Finally, map these two wage types to the paystub so that employees can see their net pay that falls under the minimum amount.

Steve Bogner

Steve Bogner is a managing partner at Insight Consulting Partners and has been working with SAP HR since 1993. He has consulted for various public, private, domestic, and global companies on their SAP HR/Payroll implementations; presented at the SAP user's group ASUG; and been featured on the Sky Radio Network program regarding SAP HR.

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