Transcript PP-PI Sales Presentation

HPPCL-TRG-HR-V0
Functional Training
Payroll
Agenda

Payroll Overview

Earnings

Deductions

Loan Type

Third Party Deductions

Pay scale Structure & Allowance Grouping

Payroll Area

Prioritization of Deductions

Bank Details

Indirect Evaluation of wage types

Payslip

Functional Flow Diagram

Posting Table
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Payroll Overview
The main purpose of this module is to administer payments and statutory
deductions, loans, advances; third party deductions etc in terms of various wage
elements and define taxability on various wage elements to achieve ultimate net
pay.
To determine the wages and salaries and to prepare various types of payroll
results & various statutory forms.
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Payroll Overview Cont…
Definition
Description
Wage Type
In the SAP System monetary amounts or time units that
serve different business purposes, and that are
processed in different ways during the payroll run, are
delimited from one another using Wage Type.
Provident Fund
Statutory benefit provided to the employee as per
Employee Provident Fund Act.
Full & Final
Settlement
Computation, Payment and deduction of employees at
the time of separation.
Pensioner
Employee who have opted for Early Separation Scheme
or employees separating on medical grounds under
TISCO Officers Family Benefit Scheme and Nominees of
employees receiving pension under above mentioned
schemes.
Third Party
Payments and perks made to external parties, as advised
by employee, from monthly salary directly.
Earnings
Payments made to the employee during service.
Deductions
Recoveries made from the salary of the employee.
Section 10
Sec.10 under Income Tax Act provides exemptions on
Payments made
Page 4 to the employee during service and at
Payroll Overview Cont…
Section 88
Investments made for Tax rebate purpose as per Income Tax
rules and House Building Loan repayment from salary.
Section 80
Sec.80 deductions are pre tax deductions from the Gross
Taxable income of the employee, as per Income Tax Rules.
Section 24
Interest that the employee is paying in the current financial
year incase he/she has taken a loan to acquire house.
Gratuity
Statutory retiral benefit provided to the employee as per
Payment of Gratuity Act.
Superannuation
Retiral benefit provided to the employee by the Company.
Feature
Feature gives default values after meeting certain conditions.
Perk
Perks are the benefits or amenities in cash or kind or in
money or money’s worth and also amenities which are not
convertible into money, provided by the employer to the
employee whether free of cost or at a concessional rate.
Installment loan
A loan type for which the principal recovery amount is fixed
and the interest amount varies. The interest amount is
calculated on monthly reducing principal balance.
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Payroll Overview Cont…
Annuity Loan
A loan type for which the monthly recovery amount (EMI)
remains constant. EMI consists of principal amount and
interest amount. During repayment period, the principal
repayment component increases and interest repayment
component decreases.
ETA Loan
Employee Temporary advance given to the employees for
purchase of computer, soft furnishing and new Fresher’s
welcome.
HPPCL – HDFC loan
Employees who had taken loan from HDFC bank and later on
the loans were taken over by the company. Recovery of loan
is done by the company on same terms and conditions as of
HDFC bank.
HPPCL House
Building Loan
Loan given by the company for purchase of house /flat or
building of house.
PF Loan
Amount of loan given to the employees on the basis of
contribution of employee in PF Trust.
ESS Loan
Loan given to the employees in the category of Early
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Separated scheme
Earnings
Earnings are the wage elements that are paid to the employee based on the
Compensation structure applicable and employment contract at the time of hiring. In
SAP, earnings which are regular in nature are captured in Infotype: 8 (Basic Pay),
Periodic payments shall be in Infotype: 0014 (Recurring payments & Deductions) and
occasional or annual payments are captured in Infotype: 0015 (Additional Payments).
Description
Wagetype
Basic Salary
1000
Addnl. Basic Salary
1005
Entertainment Allwn.
1040
House Rent Allowance
1080
Car Maint.Allowance
1250
Chauffer Wages
1255
Transport Allowance
1260
Car - Cash Option
1290
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Earnings
Page 8
Deductions
Deductions are the wage elements which are used in Payroll processing to withhold
some amounts inorder to meet statutory and company requirements and the
voluntary deductions advised by the employee. Deduction wage types, based on the
requirements and characteristics, are captured in infotype: 14 (Recurring Payments &
Deductions) and Infotype:15 (Additional Payments).
Description
Wagetype
Water Charges
2050
Recovery of Travel Advance
2633
Diesel/Petrol recovery
2634
Guest House Charges
2635
Car Hire Charges
2636
Other Advances
2637
House rent
2000
Electricity Charges - Monthly
2070
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Loan Type
Companies are providing various loans to employees in order to help them in
meeting their requirements during the course of employment. Employees are eligible
for different loans as per the eligibility criteria mentioned in Company Policy. In
order to meet the Company’s Separate Loan type- Infotype 0045 is created to for each
loan exisiting in the Company.
Loan Type
CAR LOAN
SCOOTER / MOTOR CYCLE / MOPED
BICYCLE LOAN
AIR CONDITIONER
REFRIGERATOR
FURNITURE
HOUSE HOLD ARTICALS (HHA)
PORTABLE GENERATOR LOAN
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Loan Type
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Third Party Deductions
Third Party deductions (Membership fees)- Infotype 0057 are deductions which are
authorized by the employee to deduct from his/her salary. Amounts deducted shall
direclypaid to the Payee by the Company directly every month.
LIC premiums,
Postal RD, PPF, Clubs and societies deductions are some of the third party
deductions which are used in Tata Steel.
Description
Wagetype
LIC
3004
TATA AIG
3105
Co-Operative Society
3106
Co-Operative Stores
3107
LIC Shimla
3108
LIC Manali
3109
Officers' Club
3110
TATA AIG Shimla
3111
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Pay scale Structure &
Allowance Grouping
Payscale structure and Allowance grouping defines employee groups in the
Company. These groupings help in determining Compensation structure to the
employees and value for compensation for employees. Payscale type, Payscale
Area, Payscale group, Payscale level and ESG grouping for CAP are the five
parameters based on which Paysacle & Allowance groupings shall be determined in
a Company. In HPPCL, Allowance grouping are detrmined based on the nature of
employment, location based applicability of allowances and applicability of
allowances to employee grades.
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Payroll Areas
Payroll Areas groups together the personnel numbers that are processed on the
same date and it dertmines the exact payroll periods.
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Prioritization of deductions
Prioritization of deductions helps in determining which deduction has to be
considred in case of net amount is insufficient. It also determines what happens to
the unrealized amount incase of complete deduction is not take place during current
month payroll. Deduction prioirtis ahall be assigned to each wage type inorder to
determine which wage type has to be considered first incase of net amount is
insufficient (priorities ranges from A - highest to Z - Lowest).
Following are some of the important deduction options for arrears processing
provided in SAP:
1. Deduct whole amount
2. Deduct what is possible (remaining amount cannot be negative)
3. As 2 , remaining amount to arrears table
4. Deduct everything or nothing
5. All or nothing in arrears table.
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Bank Details
Bank payment method is widely used salary payment method in the industry. After
payroll processing every month employees salaries are deposited in their respective
bank accounts maintained in Infotype:9.
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Indirect Evaluation of wage
types
Indirect Evaluation is a method to calculate the eligible amounts (default) for some of
the wage types. INVAL is the Indirect Evaluation Module used to meet the Indian
specific business requirements. This helps in reducing data entry problems and
administrative problems to Payroll Administrator.
Following are the different indirect valuation methods available in SAP:
INVAL A: To default fixed amounts
INVAL B: % on base wage type (s) + amount
INVAL C: % on base wage type (s), subject to a maximum of some fixed amounts
INVAL D: Defualt fixed amounts based on slabs applicable.
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Payslip
Payslip or remuneration statement provided to the employees after processing
payroll every month. This provides details of earnings and deductions carried out
during payroll processing. Details like Bank Account in which employee salary is
deposited, Income Tax details, Perk values, leave details etc are provided through
remuneration statement.
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Payslip
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Functional Flow DiagramPayroll
Payroll Processing
Master Data
Time Data
Error
Correction
Simulation Run
Loans Data
Investments
Details
YES
Town System
Deductions
Start Payroll Run
NO
Third party
Deductions
Corrections
Exit Payroll
Payroll Results
Wage Type
Distribution
Wage Type
Statement
Posting
To Finance
Change
Master data
Pay slip
generation
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Bank Transfer
Payroll Process
Payroll Process in SAP:
Simulation
Release for Payroll.
Start for Payroll:
Release for corrections
Exit Payroll
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Payroll Process
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Payroll Schema
Payroll Schema: To run a payroll program Payroll driver (India: HINCALCO) and Payroll
Schema (India: IN00) are required.
Payroll Schema (IN00) performs the sequence of functions carried out by the Payroll driver and
ensures that the program gathers all the relevant to run payroll for an employee in the specified
period.
Following are the important subschemas which will perform various processes during payroll
run.
INBD: is used to read the basic data from the infotypes needed for payroll processing.
INAL: used for factor and cumulate the nominal and actual bases for various computations.
ING0: is attached to function INGRY.
This compares the actual no of years of service completed by the employee till the end of the
payroll period with the minimum no of years of service for the eligibility for gratuity.
INN1: It will check whether PF to be calculated or not.
INHR: defines the treatment of House/Rent related for Taxation purpose.
IN71: Rule provides a generic taxability of wage types. This cover 4 heads:
F: stands for Wage Types that are fully taxable
E: stands for fully exemption
A: stands for Wage Types that are to be taxed as Allowance.
R: stands for Wage Types that are paid as reimbursements and taxed.
INNR: Controls the retroactive processing of Payroll and treatment of results.
Post Payroll Activities: Generation of Wage Type Statement, Posting Payroll Results to
Finance, Payslip Generation and Bank Transfer are some of the important subsequent activities
carried out after payroll run.
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Posting
The payroll results contain information that is relevant for Accounting; this is an
interface between Payroll and Accounting.
Payroll
Wage types relevant to posting
Assignments
Organizational Assignments
Cost Assignment
General and subsidiary Ledgers
Expense Accounts
Payable Accounts
Vendor Accounts
Cost center Accounting
Cost center
Cost element
Cost G/L
Posting to accounting is an interface between the Human Resources and
Accounting systems.
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Payroll Infotype
S.No
Infotype Number
Infotype Name
1
0008
Basic Pay
2
0009
Bank Transfers
3
0014
Recurring Payments and Deductions
4
0015
Additional Payments
5
0057
Membership Details
6
0045
Loans
7
0580
Previous Employment Tax
8
0581
Housing (HRA / CLA / COA)
9
0582
Exemptions; Subtype - LTA
10
0583
Car and Conveyance Details
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Payroll Infotype
11
0584
Income from other sources
12
0585
Section 80 deductions
13
0586
Investment Details
14
0587
PF contribution
15
0588
Other Statutory; sub type PTAX
16
0589
Individual Reimbursement
17
0590
Long Term Reimbursement
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Basic Pay Infotype
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