The employee master data contains - Sample Essay
Mastek will be able to use this component to calculate the remuneration for work done for each employee. However, Payroll does not just involve the calculation of remuneration, but consists of a variety of processes that are important due to the employer’s increased obligation to supply benefits and medical welfare. These benefits are products of: – Labour laws Tax laws Contribution laws Benefits laws 1. 1 PROCESS FLOW Integration Payroll can be integrated in Personnel Administration, Time Management and Accounting: -.
Standardized data retention enables you to use master data and other payroll relevant data from Personnel Administration. Time data, entered via Time Management, is automatically included in the Payroll and is valuated during the payroll run. Information on expenses and payables from Payroll is posted for accounting directly in Financial Accounting, and you assign the costs to the appropriate cost center / internal order. Through payroll Mastek can also control the financial system of third-party providers.
Features The System calculates the gross and net pay, which comprises the individual payments and deductions that are calculated during a payroll period, and are received by an employee. These payments and deductions are included in the calculation of the remuneration using different Wage Types. Wage Types Object in Payroll and Personnel Administration in which the amount and time units are stored so that they can be used, for example, for calculating pay or for determining statistics.
Wage Types separate amounts and time units for various business purposes. This also enables the system to process amounts and time units in different ways during the payroll run. After the remuneration payroll Mastek can carry out various subsequent activities, for example, you can see to remuneration payment. 1. 2 MASTEK PAYROLL IN INDIA During the payroll discussion with Mr. Ratnakar V. Jadhav, it was known that in India, Mastek runs the payroll on monthly basis. All the employees on Indian payroll are covered under this single payroll.
Therefore it has been concluded that for Indian payroll operations there will only be one Payroll Area (01 – Monthly – India) to cater to the Indian payroll needs. Payroll Area A payroll area specifies when payroll is to be run; the earliest payroll period for retroactive accounting, and the periods for which payroll is to be run. Payroll is then locked for employees assigned to a payroll area that is marked in this way. The various wage types have also been identified, which are being used in the current payroll at Mastek, to be created in the SAP R/3 system for the payroll.
The cut-off date for collecting all the required data is 20th of every month and the processing of the payroll starts after that, Normally the processing of the payroll starts by 23rd or 24th of the month after collating all the data received by the concerned officer(s). The payday is the last working day of the month. The chart attached herewith will make the wage type understanding more clearly. The wage types shown in this chart are the wage types used by Mastek. Handling of various scenarios through Payroll – India Hiring (Taking place other than first of the month)
The Payroll – India, takes cares of the wages to be paid to the employees who are being hired other than the first day of the month, on a pro-rata basis. The payroll will calculate the wage amounts accordingly. Separation (Taking place other than last day of the month) The Payroll – India, also takes cares of the wages to be paid to the employees who are being separated other than the last day of the month, on a pro-rata basis. The payroll will calculate the wage amounts accordingly. Deputation to any other country (Taking place other than first day of the month) Deputation has been defined in two ways at Mastek: –
1. Temporary Assignment – Where the employee continues to get his base country’s salary. 2. Repatriation – Where the employee leaves the base country’s organization joins sister concern in a different country. The Payroll will not be stopped for the temporary assignments as the employee is entitled to receive his base country’s salary and his base station’s salary is stopped when he is permanently transferred to another country. The Payroll – India will take care in calculating the pro-rata amounts for the wages paid to the employee if this activity takes place other than the first day of the month.
It should be noted that if an employee goes on a temporary deputation from India and if he/she was paid India Allowance in India then he/she will not get his/her “India Allowance” till the time he/she stays abroad on deputation. Return from Deputation The same activity will take place when an employee returns to his base country after either a permanent deputation or a temporary deputation. Leave without pay The data for this will be maintained in the time management module and the Payroll will pick the data to calculate the salary accordingly. 1. 3 PAYROLL BASICS.
This section tries to explain the steps involved in the payroll run. Purpose The Payroll is based on an Indian payroll driver. This payroll driver has been created for India. It takes the statutory and administrative regulations of India into account. Since the payroll driver has a modular structure, Mastek can use the Customizing functions to quickly modify the payroll procedure to meet the particular requirements of the enterprise. Process Flow When you access Payroll, the Indian payroll driver (HINCALC0) calls the accompanying payroll schema, which consists of a sequence of functions.
For each activity, the individual functions import data from internal tables and payroll relevant files. Payroll is then performed as follows: – 1. The system updates the databases and imports the master data relevant to payroll. 2. The system imports the last payroll result. 3. The system calculates the gross wage and considers the shift schedule, shift change compensation, and valuation bases. Any master data relevant to payroll is included in the calculation at this point. 4. The system calculates the partial period factors, lump sums and salary elements, and cumulates the gross results.
5. The system calculates the net remuneration, and performs retroactive accounting if specific master data has been changed in previous payroll periods. Result After the payroll run, you can transfer the payroll results to Financial Accounting. 1. 4 GROSS PART OF PAYROLL Purpose Using this component you determine an employee’s gross pay, according to contractual requirements, which is composed of payments and deductions. Different factors determine whether such payments and deductions increase or reduce the taxable income. Such factors include the statutory regulations of India.
Individual gross values are grouped together as bases for taxes according to the specifications of India and its states/regions and pay scale regulations for a profession. These gross cumulations are used to calculate specific values. 1. 5 NET PART OF PAYROLL Purpose This component enables you to determine an employee’s net remuneration, according to contractual requirements. Net pay is the amount paid after the deduction of tax and other statutory contributions from gross remuneration. You can use different gross values to calculate deductions.
For this reason, you form different totals during a payroll run, which you then use for future processing. Deductions Purpose This component calculates all payments to third parties with the exception of taxes and other statutory contributions, which are deducted directly from the employee’s pay. Maximum thresholds for deductions and outstanding payments are taken into account. Features Within payroll, deductions can refer to gross remuneration or to net remuneration. The following types of deductions are differentiated between: – Statutory deductions Statutory deductions include taxes or PF payments, for example.
Voluntary deductions Voluntary deductions include payments like voluntary contribution towards PF etc. Moreover, you differentiate between: – One-off Deductions For example a donation Recurring Deductions For example, in the case of imputed income or a savings plan. 1. 6 SUBSEQUENT ACTIVITIES Purpose The component comprises the activities that you must carry out after payroll (gross – net – payroll). 1. 6. 1 REMUNERATION STATEMENT Purpose The R/3 System lists all the payments and deductions made for an employee in a clear format on the remuneration statement.
The standard system also allows you to enter personal or general notifications for your employees. These are printed on the remuneration statement as additional information. This additional information, for example, general company information or birthday greetings can be entered in the Notifications infotype (0128). You usually create a remuneration statement after the payroll run and before the bank transfer. If you perform more than one payroll run in a single period, you can create remuneration statements after each payroll run.
You specify the format, structure and form content for the remuneration statement in Customizing for Payroll under Remuneration Statement. 1. 6. 2 WAGE AND SALARY PAYMENTS Purpose The process of wage and salary payment allows you to make payments to third parties as well as to your employees. This process supports different payment medium, for example, bank transfers and cheques. Prerequisites The employee master data contains the following payment data: – Infotypes used from International version. Organizational Assignment infotype (0001) Personal Data infotype (0002) Payroll status infotype (0003)
Addresses infotype (0006) Planned working time infotype (0007) Basic pay infotype (0008) in which you can specify the wage types related to monthly earnings. For Mastek, Indian payroll, they will be Basic Pay, HRA, Sp. Allowance, India Allowance, Conveyance Allowance, Lunch Allowance and Adhoc Allowance. Bank Details infotype (0009) in which you specify the main bank and, if required, other bank details for your employees The term Bank details therefore has a broader meaning: For example, you can also specify in this infotype that payment should be effected by cheque/bank transfer.