Basic Salary for India

In this section of the Implementation Guide (IMG), you define rules that govern the employee's
basic salary.
Basic salary is a statutory monthly remuneration applicable to all employees in an organization.
Most components of salary in the organization are calculated, based on the employee's basic
salary, personal pay and dearness allowance.
Personal pay is a component of salary used to pay the difference in remuneration as an
adjustment payment. This is subject to company rules in cases such as, when a new employee
does not fit in the employer's pre-defined salary brackets and the employer needs to make a
payment to match the agreed remuneration.
An employee's basic salary is agreed upon during recruitment and is updated in case of status
changes such as a promotion, or transfer and so on.
A basic salary range is normally fixed for a pay scale grouping for allowance and could be
incremented periodically. These increments could be paid as a fixed amount or as a percentage of
a base amount depending on the company's policy.
Example
For a pay scale grouping for allowance MN01 the basic range is fixed at Rs. 5000 to 6000 with
increments of Rs. 200 and increments of Rs. 300 there on till Rs. 7800.
This would mean that an employee will get Rs. 5000 at the least in this group and will get
increments in steps Rs. 200 till he or she gets Rs. 6000 as basic, after which the increment will be
in the steps of Rs 300.
In case the employee's salary doesn't fit in the exact steps of the increments, his or her basic
salary is set in the nearest lower step and the rest is paid as Personal Pay (PP). If the employee
was to be given a basic salary of Rs. 5700 he or she would receive a basic of INR 5600 along
with a personal pay of Rs. 100.
There could be varying company practices for calculating an employee's personal pay.
To set up the basic salary component, you:
Assign Basic Wage Types to Pay Scale grouping for allowances
Define Basic Codes
Assign Basic Codes for Allowance Groups
Assign Basic Slabs to Pay Scale Groupings for Allowances
Maintain Appraisal Criteria for Basic Salary
Maintain Increment Criteria for Basic Salary

Assign Basic Wage Types to Grouping for Allowances

In this activity, you assign a basic wage type and a Personal Pay wage type to each pay scale
grouping for allowances created under Pay Scale Groupings -> Define Pay Scale Groupings for
Allowances. These wage types are assigned to the pay scale groupings for the purpose of
identifying a wage type and associating this for the purpose of payment of the base component of
salary referred to as Basic. Basic pay, in some cases along with the dearness allowance
component is used to calculate other allowances.

Activities
1. Enter the allowance grouping in the Algrp field.
2. Select the basic wage type and the personal pay wage to be assigned to the pay scale grouping
for allowances in the Basic WT and the the PayWT field respectively.
3. Enter the validity period and save your entries.

Assign Basic Wage Types to Grouping for Allowances

In this activity, you assign a basic wage type and a Personal Pay wage type to each pay scale
grouping for allowances created under Pay Scale Groupings -> Define Pay Scale Groupings for
Allowances . These wage types are assigned to the pay scale groupings for the purpose of
identifying a wage type and associating this for the purpose of payment of the base component of
salary refered to as Basic. Basic pay, in some cases along with the dearness allowance component
is used to calculate other allowances.

Activities

1. Enter the allowance grouping in the Algrp field.

2. Select the basic wage type and the personal pay wage to be assigned to the pay scale grouping
for allowances in the Basic WT and the the PayWT field respectively.
3. Enter the validity period and save your entries.
Define Basic Codes
In this activity, you define the basic codes which define the basic salary range. The range of basic
salary is also refered to as basic slabs. These slabs are used to fix each employee's basic salary.
Activities
1. Enter a basic code for your company and provide a description in the Basic Cd and Description
fields respectively.
2. Save your Entries

Assign Basic Codes for Allowance Groups

In this activity, you assign the basic codes to a pay scale groupings for allowances. You also
define the basic increment method type for the Basic Code of the allowance group and the specify
if personal pay is to be retained for the allowance grouping, when the employee is given an
increment.
Activities
1. Enter the pay scale grouping for allowance and the basic codes to be associated in the AlGrp
and Basic Cd. fields respectively.
2. Enter the payment method type in the Method Type field.
3. Specify if personal pay is to be paid in the Retain Pay field.
4. Enter the validity period and save your entries.
Assign Basic Slabs to Pay Scale Groupings for Allowance
In this activity, you define the salary slabs for a basic code and method type combination. You
can define more than one slab for a basic code.
This is used to set any employee's basic salary during recruitment. You define the method used to
calculate increments that the employee would receive due to reasons such as promotions, change
in pay scale groupings and so on. The calculation method could be a fixed amount or a percentage
of basic salary.
Example
The basic code BM01 with the increment method 'Amount based' for slabs could be defined as:
1000-250-2000-500-4000. Where the basic code contains two slabs, the first SL01 containing the
range of Rs.1000 to Rs.2000 with increments of Rs.250 and SL02 with the range Rs.2000 to
Rs.4000 with increments of Rs. 500.
This indicates that increments will be paid at the rate of Rs.250 till the basic amount reaches a
maximum of Rs.2000. The second slab begins with a minimum basic of Rs.2000 and is
incremented at Rs.500, till the amount reaches Rs.4000.

Activities
After entering the basic code and selecting the increment method, assign a sequence number in
the Seq. No field.
Specify the minimum and maximum range for the basic salary.
Enter the increment amount or percentage, as applicable in the Inc. Amount and Inc.% fields
respectively. This is based on the increment method type entered in the Inc. Method field.
Specify the method used to calculate the increment percentages in the Percentage Method field in
case the increments are based on a percentage of basic salary.
Select the currency and save your entries.
Maintain Appraisal Criteria for Basic Salary
In this activity you maintain the criteria used in the appraisal process and assign them to a pay
scale grouping for allowance.
For an allowance grouping, you assign a combination of the required minimum age, work
experience and appraisal points to be fulfilled by the employee for promotion to the new pay
scale group and new pay scale level specified.
The increment option is used for incrementing the current basic to calculate the new basic salary
applicable to the new position.
Activities
Enter a pay scale grouping for allowance in the AlGrp field.
Make the entries relevant to age, experience, pay scale level, type of employment, pay scale
group and level along with the increment option in the respective fields.
Enter the validity period and save your entries.
Maintain Increment Criteria for Basic Salary
In this activity, you assign the number of increments that an employee belonging to a pay scale
grouping is eligible for. The eligibility criteria is based on his or her appraisal points.
Activities
Enter a pay scale grouping for allowance in the AlGrp field and a sequence number.
Enter the appraisal points and the associated number of increments in the Appraisal Points and
No.Inc. fields respectively.
Enter the validity dates and save your entries.
Dearness Allowance
In this section of the Implementation Guide (IMG), you define rules that govern the employees’
dearness allowance.
Dearness Allowance is a non-statutory monthly allowance related to changes of cost of living in a
particular town, region or state and is based on the Consumer Price Index (CPI). Changes in the
employee’s work environment like transfers, promotions and so on, affect the amount of this
allowance. In case the employer opts to pay this allowance, it is statutory for the employer to
revise this allowance every quarter.
This is a fully taxable, non-statutory component that helps determine taxability of some other
allowances in general.
Define Consumer Price Indices
In this activity, you define consumer price indices for Dearness Allowance (DA) that are
applicable for different locations of the company.
The consumer price index, acts as a guide to the cost of living in a state, and is evaluated by the
base facts and figures as declared by the government.
Activities
7. Enter the statutory index code in the Index code field.
2. Enter a description in the Index Text field.
3. Save your entries.
Assign Current and Reference Values for Consumer Price Indic
In this activity, you associate current values and reference values for dearness allowance to the
index code.
The difference between the referenced and the current value of the Index is used to calculate the
variable Dearness Allowance (DA) payable to the employee.
Activities
7. Enter the index code in the Index code field.
2. Enter the reference value in the Ref value field.
3. Enter current value in the Cur value field.
4. Enter the validity period for current value.
5. Save your entries.
Maintain Basic Slab Details for Dearness Allowance
In this activity, you maintain Dearness Allowance (DA) rules for individual slabs. Slabs are
salary brackets as specified for a State by the respective State Government or local authority.
The methods use inputs such as the basic salary slab limit and percentages to calculate DA based
on a percentage of the employee’s salary, or the rupees per point increase in consumer price index
to calculate the additional DA payable.
Requirements
Perform this activity when dearness allowance is dependent on the changes in the value of the
Consumer Price Index and the employee’s basic salary slabs.
Activities
7. Enter a two digit alphanumeric value for the Basic slab along with a sequence number in
the Basic slab and SeqNo. Field respectively.
2. Enter the Fixed value amount in the FxVal. Field.
3. Enter the percentage factor of basis wage type in the Percentage field.
4. Enter the Index code, increase in Rupees per point increase in consumer price index
and the employee’s basic salary slabs.
Activities
7. Enter a two digit alphanumeric value for the Basic slab along with a sequence number in
the Basic slab and SeqNo. Field respectively.
2. Enter the Fixed value amount in the FxVal. Field.
3. Enter the percentage factor of basis wage type in the Percentage field.
4. Enter the Index code, increase in Rupees per point increase in consumer price index, Increase
in dearness allowance in the respective fields.
5. Enter the multiplication factor to calculate the consumer price index in the the CPI % mul.fac
field.
6. Select the calculation method for DA in the DA method type field.
7. Enter the currency in the Curr. Field.
8. Save your entries.

Maintain Dearness Allowance Rules for Allowance Groupings

In this activity, you maintain dearness allowance (DA) rules for pay scale groupings based on the
dearness allowance calculation type selected.
DA amounts payable for a slab are calculated on the basis of the calculation method selected and
the rules applied to each basic slab.
The calculation types use employee data like basic slab, fixed value for DA along with the data
necessary to calculate changes in the cost of living.
Activities
7. Select the allowance grouping for dearness allowance in the All. Group field.
2. Enter the start and end dates for the period.
3. Select the dearness allowance type in the DA type field.
4. Enter the Fixed Value amount, percentage factor of basis wage type, value for basic slab and
the index code in the respective fields.
5. Enter the rupees per point increase in consumer price index, minimum variable dearness
allowance and the wage type for fixed dearness
Maintain Dearness Allowance Rules for Allowance Groupings
In this activity, you maintain dearness allowance (DA) rules for pay scale groupings based on the
dearness allowance calculation type selected.
DA amounts payable for a slab are calculated on the basis of the calculation method selected and
the rules applied to each basic slab.
The calculation types use employee data like basic slab, fixed value for DA along with the data
necessary to calculate changes in the cost of living.
Activities
7. Select the allowance grouping for dearness allowance in the All. Group field.
2. Enter the start and end dates for the period.
3. Select the dearness allowance type in the DA type field.
4. Enter the Fixed Value amount, percentage factor of basis wage type, value for basic slab and
the index code in the respective fields.
5. Enter the rupees per point increase in consumer price index, minimum variable dearness
allowance and the wage type for fixed dearness
Maintain Dearness Allowance Rules for Allowance Groupings
In this activity, you maintain dearness allowance (DA) rules for pay scale groupings based on the
dearness allowance calculation type selected.
DA amounts payable for a slab are calculated on the basis of the calculation method selected and
the rules applied to each basic slab.
The calculation types use employee data like basic slab, fixed value for DA along with the data
necessary to calculate changes in the cost of living.
Activities
7. Select the allowance grouping for dearness allowance in the All. Group field.
2. Enter the start and end dates for the period.
3. Select the dearness allowance type in the DA type field.
4. Enter the Fixed Value amount, percentage factor of basis wage type, value for basic slab and
the index code in the respective fields.
5. Enter the rupees per point increase in consumer price index, minimum variable dearness
allowance and the wage type for fixed dearness
6. Enter the wage type for variable dearness allowance in the Var DA field.
7. Select the currency and the validity dates and save your entries.

Maintain Dearness Allowance Consumer Price Index Slab Detail

In this activity, you maintain the slabs or Dearness Allowance Consumer Price Index limits. This
is achieved by associating a sequence number and an upper limit to the DA Reference code. You
also associate the Rupees per point increase in the consumer price index which is multiplied with
the difference between the current and referenced values of the consumer price index to calculate
the amount of variable dearness allowance payable to the employee.

Reimbursements, Allowances and Perks

Allowances are a part of the employee’s total salary, which is normally paid through the payslip
and are paid on a regular basis. These could be monthly, like House Rent Allowance (HRA) or on
an annual basis like Leave Travel Allowance (LTA). These are always cash components and not
paid in kind.
Reimbursements are those components that are paid against a claim or an expense incurred by an
employee. For example, medical reimbursement against bills. These may have maximum limits
with additional rules applicable when availed.
Perks are that component of the total salary, which are generally availed by the employee in terms
of kind on which the employer specifies a limit. In some cases, no amounts are specified and it is
claimed against actual expenses incurred.
The eligibility and amounts for any of these components depend on the geographical location,
department, grade and employee group that he or she belongs to, and the years of experience in
the organization.
Other factors that control these amounts are number of dependents, children, area, job, marital
status and so on.
Unclaimed reimbursements and perks as per the company’s law are:
Given to employees at the end of the year as an allowance.
Carried forward if the employee chooses
Lapse after a specified period
Assign Wage Type Model for Pay Scale Grouping for Allowances
In this activity, you assign ‘wage type models’ to each ‘ pay scale grouping for allowances’
that was created. The Wage Type Model will indicate which benefits would apply to, or what
amounts will be deducted from a particular Pay Scale Grouping for Allowance.
Wage Type Models are a set of ‘Wage Types (WTs)’ used by SAP. These WageTypes can be an
amount or a deduction.
The Wage Type Models must be prefixed with ‘20/’ to indicate that, a maximum of 20 wage
types can be stored in a particular WT model.

Activities
7. Enter the corresponding Wage Type Model in the WT model field, for each ‘Pay Scale
Grouping for Allowances’ and save your entries
Example
Eligibility
Mr.Steven is a permanent employee of DCS Pvt. Ltd. He works for the FI department and is
located in Bombay at the position of a supervisor with three and a half years of work experience.
He is entitled to the following benefits:
House rent allowance of INR 5000
The perk of a club membership within INR 25000
Leave travel reimbursement of INR17000
He may receive reimbursements on leave travel thrice if he has 2 children
Setting of amounts
These amounts can be set in one of the following ways:
As a fixed amount for a group of employees
As a percentage of certain base components like basic, DA or personal pay, or a combination of
these subject to a maximum amount
As a fixed amount plus percentage of some base components like basic, DA or personal pay or a
combination of all this
Any of the above based on salary slabs of the employees basic pay
The tax liability of any of these allowances, reimbursements or perks depend on their individual
nature and corresponding income tax law.
Assign Wage Type Model for Pay Scale Grouping for Allowances
In this activity, you assign ‘wage type models’ to each ‘ pay scale grouping for allowances’
that was created. The Wage Type Model will indicate which benefits would apply to, or what
amounts will be deducted from a particular Pay Scale Grouping for Allowance.
Wage Type Models are a set of ‘Wage Types (WTs)’ used by SAP. These WageTypes can be an
amount or a deduction.
The Wage Type Models must be prefixed with ‘20/’ to indicate that, a maximum of 20 wage
types can be stored in a particular WT model.
Activities
7. Enter the corresponding Wage Type Model in the WT model field, for each ‘Pay Scale
Grouping for Allowances’ and save your entries.

Maintain Default Wage Types for Basic Pay

In this step, you can set up default wage types based on your internal company structure for the
Basic Pay infotype (0008) using the feature Planned remuneration specification (LGMST)
defined in the previous step.
Example
You want the system to propose the wage type “standard pay” for salaried employees and
industrial workers in all personnel areas. So you assigned the key “----1DU” to these two
employee subgroups in the previous step. In this step, you determine the default wage type
“standard pay” for this key.
Requirements
You have to define the LGMST feature.
Standard Settings
The standard system contains a model default wage type for the LGMST feature. This model will
not reflect the situation in your company exactly.
Recommendation
Use the model as an example.
Activities
7. Delete and create entries as required.
2. For each new one, enter the return code of the LGMST feature.
7. Enter the key for the “feature for default wage types”.
b) Define their validity period.
c) Assign numbers to the wage types if there are more than one.
d) Define how wage types are to be assigned by entering an indicator in the Mode field. The
following indicators are set:
Indicator Meaning
F The wage type is assigned for basic pay and cannot
be overwritten (fixed value).
O The wage type can be entered and/or
overwritten.
BLANK No wage type entries may be made.
e) In the Wage type field, enter the default wage type for basic pay.
Maintain Wage Type Characteristics
In this step, you define the characteristics for the wage types that you copied to the customer
name range in the previous steps.
This step only affects wage type characteristics that control online wage type input.
Consequently, you only need to carry out this step if you also want to use the wage types that you
copied previously as dialog wage types.
You define the wage type characteristics that affect the payroll process in the thematic sections of
the Implementation Guide (IMG). For example, in the Payroll IMG, under Incentive Wage Types
there is a section on Wage Types. Here, you edit the wage types affecting incentive wages and in
particular, how they behave during payroll.
Examples
Wage type characteristics that affect the input of wage types online include the following
examples:
The wage type amount must be between USD 10 and USD 1000.
The number of a wage type must be between 1 and 100.
The wage type amount must not be included in the total line of the basic pay.
An amount for a wage type must be entered.
Only the wage type number can be specified.
A particular time/unit of measurement is proposed as the default value.
A wage type must be valuated indirectly.
Requirements
You have created your own wage type catalog in the customer name range in the previous steps.
You have an overview of the characteristics of your wage types.
Standard Settings
In the standard system, your customer wage types have the same wage type characteristics as the
corresponding SAP sample wage types that you copied.
Activities
7. Flag the wage types that have characteristics that you want to change. Choose Detail.
2. Enter the required data and save the modified wage types characteristics.
When maintaining a wage type, the entry in the Indirect valuation panel must be specific to
‘Payroll India’.
The Indian specific entry for the Indirect eval.module field is ‘INVAL’.
The module variants for INVAL are A, B, C and D where:
Variant ‘A’
Indicates a fixed amount.
Variant ‘B’
Indicates the sum of percentages of various wage types plus a fixed amount.
Variant ‘C’
Indicates the sum of percentages of various wage types subject to maximum amount.
Variant ‘D’
Indicates the basic salary slab based amount.

Maintain Pay Scale Groups and Levels

In this step, you represent the collective agreement governing payment of your employees in the
SAP system.
Example
You would like to enter wage types in the Basic Pay infotype (0008) which should be valuated
indirectly using the pay scale groups/levels.
Requirements
Pay scale types and areas must be defined.
The collective agreement provisions for each employee group and subgroup must be defined.
You must familiarize yourself with the collective agreements valid in your enterprise.
Standard Settings
The SAP standard system contains model entries.
Recommendation
Use the above functionality.
Actions
7. Check the SAP model entries.
2. Delete any unnecessary entries.
3. Set up the pay scale classification and related data according to your requirements.
Take note of the field documentation for the individual fields.
7. In the dialog box, make your entries in the Pay scale type and Pay scale area fields.
b) Choose New entries.
c) Set up the collective agreement provision in the Grpg field as a means of differentiating
between pay scales for the various employee subgroups.
d) Enter the pay scale groups and levels according to the valid collective agreement for a specific
date.
e) Enter the wage type key in the Wage type field, if required.
This entry is used to check an employee’s pay scale data and for indirect valuation.
f) Enter values in the Amount and Currency fields.

Maintain Valuation of Base Wage Types

You may have already defined indirect valuation for certain wage types in the step “ Check wage
type characteristics”.
Depending on which module you use for indirect valuation (see documentation on the Module
name field), you need to define additional procedures to ensure that indirect valuation functions
correctly.
Example
In the Basic Pay infotype (0008), an employee has the wage types ‘standard pay’ and ‘standard
bonus’. You also want to assign to your employee the wage type ‘percentage bonus’ which
should be x% of the sum of the first two wage types.
You have defined the module PRZNT for the ‘percentage bonus’ wage type.
In this step, you must define the wage types to be used as the basis for calculating the percentage
bonus.
Requirements
The wage type catalog and wage type characteristics must be defined.
Standard Settings
The standard SAP R/3 System contains some models for valuating basic
wage types.
Recommendation
Read the documentation on the Module name and
Module variant fields in the section entitled “Check wage type characteristics”.
Activities
7. Delete any entries that you do not need.
2. Create new entries based on your requirements and the definitions in the step “Check wage
type characteristics”
7. Name the module that you want to use.
b) Enter the wage type you defined in the ‘Check wage type characteristics’ step.
c) Number the wage types which are to be used as the basis for indirect valuation.
d) Define the validity period.
e) Define base wage type(s) for indirect valuation.
f) Specify the percentage rate for weighting the base wage type.
Maintain Allowance Rules based on Slabs
In this activity, you set up the allowance rules for pay scale groupings for allowances by
assigning wage types to Basic slabs which are groupings for basic salary grouped under blocks or
slabs.
This is achieved by associating a wage type with additional amounts specified for a
reimbursement, allowance or perk (RAP) and the basic slabs for which the calculation rules
apply. When assigning the additional value for a wage type amount defined as a reimbursement,
allowance or perk (RAPs), variants ‘B’ and ‘C’ of the Indian specific ‘Indirect Evaluation
Module’ (INVAL) are used, where:
‘B’ indicates a percentage of base wage type plus a fixed amount
‘C’ indicates a percentage of base wage subject to a maximum amount
Activities
7. Enter the applicable wage type in the Wage type field.
2. Enter the basic slabs to which the calculation rules apply in the Basic Slab field and specify a
sequence number.
3. Enter the upper limit for the applicable basic slabs, the additional wage type amount to be
considered for calculation of RAPs and the module variant as applicable in the Basic Limit , Rap
Amount and MdVar fields respectively.
Calculate Eligibility for RAPs
In this activity, you set up the eligibility details to calculate any employee’s Reimbursement,
Allowance or Perk (RAP).
You associate the eligibility criteria for a salary bracket to a Wage Type and specify the type of
allowance. These Wage Types are read by the Basic Pay Infotype (0008) and processed as per the
criteria applicable for the employee’s ‘Pay Scale Grouping for Allowances’.
Activities
Associate the eligibility criteria and calculation required for a particular Wage Type.
Enter the validity period and save your entries.

Maintain Extra Eligibility Criteria for RAPs

In this feature (40ECS), you set up criteria to determine the factor which is multiplied with the
Reimbursement, Allowance or Perk (RAP) amount to calculate the amount payable to the
employee. The feature considers the following employee details:
Country Grouping
Company code
Pay scale grouping for allowances
Wage type
Job
Gender key
Marital status key
Region (State, Province, County)
Number of children for children education allowance
Number of children for children hostel allowance
Number of dependents for any other allowance
Based on these criteria, this feature derives the factor which is multiplied with the RAP amount,
as per the company rules for the relevant pay scale grouping for allowances, in the Indian specific
indirect valuation model ‘INVAL’, for all its variants A, B, C and D.
Example
For the purpose of evaluating an allowance, for example, the children’s education allowance for
an employee, the system must first check for the number of children. This is achieved by using a
decision tree as follows in the scenario.
As per company A’s policy, all employees belonging to the Payscale grouping for allowance, for
example, MN01 receive twice the amount eligible for Children’s education allowance (say
wagetype M260) in case the employee has two or more children.
For this example the feature would be as follows:
Line
1 D MOLGA
2 ** &ELIAL=1
3 40 D LGART
4 40 **** &ELIAL=1
5 40 M260 D CEANO
6 40 M260 * &ELIAL=2
7 40 M260 1 &ELIAL=1
The above feature is described per line, as follows:
7. The feature first checks for the country indicator.
2. If the country is not ‘India’, the multiplication factor is set to one, which indicates that no
changes are affected.
3. If the country is identified as ‘India’, the feature checks for the wage type.
4. If the wage type is not valid for ‘Childrens education allowance’ then the multiplication factor
is set to one.
5. If the wage type is identified as ‘Children education allowance’ then the feature checks for
number of children.
6. If the number of children is not one, then the multiplication factor is set to two, which indicates
that the allowance is doubled for this employee.
7. If the number of children is found to be one then the multiplication factor is set to one, which
indicates that no changes are affected.
The wage type for children’s education allowance in this case is associated with an amount,
which is validated after checking for the number of children and the maximum eligibility amount.
Claims:
This section guides you through the customizing steps necessary for claims processing.
Capture Additional Claims Disbursement Information
In this chapter you make the settings to enable the system to capture additional claims
disbursement information.
These settings are optional. Use this if your company needs to store information other than that
provided by the SAP standard system.
WARNING
You should only carry out any of the steps in this chapter if both of the following points apply:
The SAP standard processes do not suit your needs
You are a competent ABAP/4 programmer
Modify Structure to Capture Additional Claims Information
SAP provides for you to define Screen enhancements in the Disbursement of Claims program
(HINCREMP) using customer defined subscreens and the Screen control for claims
disbursement feature (40CLM).
WARNING
You should only carry out this step if both of the following points apply:
The SAP standard processes do not suit your needs.
You are a competent ABAP/4 programmer.
Requirements
You are processing claims using the claims disbursement program (transaction
PC00_M40_REMP ) and want to store additional details for every claim that is processed.
Activities
1. Modify the PINCL structure using the CI_PINCL customer include.
2. Define all fields to be captured and saved into the customer defined tables.
3. Activate the structure CI_PINCL.
4. Design customer specific tables or infotypes to store additional information captured during
claims processing.
5. Save all entries.

Create Subscreens in Claims Disbursement Module

You can define screen enhancements for the module pool HINCREMP using customer defined
subscreens, and the Screen control for claims disbursement feature (40CLM).
Create subscreens in the module pool within a customer name range. Customer fields defined in
structure PINCL are available in the header line of structure PINCT. Use these fields to capture
the additional data.
You also have an option to use customized fields. You must, however, write the logic in PAI of
the customer subscreen. This is neccessary for transferring data from the customized fields, to
their corresponding fields in the headerline of the structure PINCT.
The system only stores the PINCT headerline data in the internal table, and returns it through
customer exit. This allows the data to be saved in customer specific tables.
Requirements
You are doing claims processing using claims disbursement program (transaction
PC00_M40_REMP ) and want to store additional details for every claim that is processed
Determine Subscreen Number for Claims Info
In this activity, you modify the the Claims feature (40CLM) to set up criteria to determine the sub
screen number displayed in the additional information dialog for claims disbursement, accessable
from the Enter Reimbuirsement for Employees Transaction (PC00_M40_REMP).
Create the subscreen for the Disbursement of Claims program in the module pool, within the
customer name range.
The 40CLM feature determines the sub screen displayed when the additional information dialog
is called, based on:
PERNR Employee number
INFTY Infotype being updated (Infotype 0015 or 0267)
TAXCD Reimbursement type
Example
You want to record additional details for Leave Travel reimbursements (SLTA) and Medical
Reimbursements (SMED). The subscreen numbers that will be created in module pool
ZHINCREMP is 9001 for SLTA and 9002 for medical Reimbursements. All other
reimbursement details are captured in subscreen 9000.
000010 D TAXCD
000020 **** &40CLM=ZHINCREMP/9000,
000030 SLTA &40CLM=ZHINCREMP/9001,
000040 SMED &40CLM=ZHINCREMP/9002
User Exit: Save and Print Claims additional information
SAP provides screen enhancements in claim disbursements to record additional customer specific
details related to claims, when a claim is processed through the claim disbursement transaction
PC00_M40_REMP.
When a claim is processed successfully, SAP passes the data recorded in screen enhancements
via the EXIT_SAPLHRPADINA1_008 customer exit in enhancement HRINRAP3. Use this exit to
save the data passed in the customer-defined Infotypes.
When claim details are displayed, SAP passes the data captured and saved in exit
EXIT_SAPLHRPADINA1_008 via customer exit EXIT_SAPLHRPADINA1_009 in enhancement
HRINRAP3. Use this exit can to write the data into the claims disbursement detail report.
To create the user exit, see the instructions below:
WARNING
You should only carry out this step if both of the following points apply:
The SAP standard processes do not suit your needs
You are a competent ABAP/4 programmer
In this step, you can implement the user exit EXIT_SAPLHRPADINA1_008 to save claims data
into customer defined tables, or the EXIT_SAPLHRPADINA1_009 to print customer-specific data
in the claims disbursement report.
If you need to implement this user exit, you first create a project for the user exit, then assign the
user exit to your project. Then you write the code for the user exit, and finally activate the project.
For general information about user exits, refer to the Enhancements section in the Basis
component documentation in the R/3 library. In addition, there is detailed information about each
user exit that you can access when you assign it to your project.
Activities
Start by creating your project:
1. Enter a name for your project.
2. Choose Modification -> Create.
3. Enter a short text for your project and choose Save.
Next assign the user exit to your project:
1. Choose Components.
2. Enter the name(s) of the user exits you want to implement.
Next make your coding modifications:
1. Choose Change.
2. Select the user exit for which you want to write code.
3. Select the corresponding include.
The system will then prompt you to create this include, and you can continue to write your code
in it.
Now activate your project:
1. Return to the initial screen and choose Activate project.
Further Notes
The parameters passed for the customized logic in EXIT_SAPLHRPADINA1_008 are:
Additional Payments Infotype (0015) record, in case of disbursements made through regular
payroll
One-Time Payments Off-Cycle Infotype (0267) record, in case the disbursement is to made
through off cycle
Claim details that include customer defined fields apart from fields that store claim processing
calculations
The data passed in the claim structure can be changed so that it can be further used in the claims
detailed report using EXIT_SAPLHRPADINA1_009.
Handling Exceptions
In case of exceptions raised, the entire claim transaction will be rolled back and the claim will be
rejected.
The parameters passed for the customized logic in EXIT_SAPLHRPADINA1_009 are:
Claim details that include customer defined fields apart from fields that store claim processing
calculations
Use this data for list printing using write statements.
Maintain Salary Year and Period End Treatment of RAP
In this activity, you assign the salary year or calendar type and period end treatment for a
particular reimbursement or perk as defined in the Tax Code field defined in T7INT9 and pay
scale grouping for allowances.
Period end treatment can be a carry forward of balance or disbursement of balance which is paid
and accordingly taxed.
Activities
1. Enter a four character alphanumeric value for pay scale grouping for allowances in the AlGrp
field.
2. Enter a four character alphanumeric value for Reimbursement/Perk Tax Code as defined in the
previous activity.
3. Select the calendar type to be assigned to the respective pay scale grouping for allowances in
the CalType field.
4. For carry forward treatment enter number in terms of units of calendar type for which balance
is to be carried forward. In case of unlimited carry forward enter 999. Leave number of units 0 for
Pay and Tax.
5. Pay and Tax Wage Type is to be maintained for Pay and Tax period end Treatment. This wage
type will be used when disbursement is made.
6. Enter the validity dates and save your entries.
User Exit: Determine Carry Forward Dates
SAP provides tables for you to store the validity dates when amounts claimed by the employee
are Carried Forward. As it may be the case within your organization that different rules for
determining validity dates are used from the dates that can be configured, SAP provides you with
the user exit EXIT_SAPLHRPADINA1_007 in enhancement HRINRAP6. This user exit allows
you to determine the carry forward date for claims.
To create the user exit, see the instructions below:
WARNING
You should only carry out this step if both of the following points apply:
The SAP standard processes do not suit your needs
You are a competent ABAP/4 programmer
In this step, you can implement the user exit EXIT_SAPLHRPADINA1_007 to define carry
forward dates in accordance with your requirements.
If you need to implement this user exit, you first create a project for the user exit, then assign the
user exit to your project. Then you write the coding for the user exit, and finally activate the
project.
For general information about user exits, refer to the Enhancements section in the Basis
component documentation in the R/3 library. In addition, there is detailed information about each
user exit that you can access when you assign it to your project.
Activities
Start by creating your project:
1. Enter a name for your project.
2. Choose Modification -> Create.
3. Enter a short text for your project and choose Save.
Next assign the user exit to your project:
1. Choose Components.
2. Enter the name(s) of the user exits you want to implement.
Next make your coding modifications:
1. Choose Change.
2. Select the user exit for which you want to write code.
3. Select the corresponding include.
The system will then prompt you to create this include, and you can continue to write your code
in it.
Now activate your project:
1. Return to the initial screen and choose Activate project.
Further Notes
Use this Exit function to determine the eligibility begin and end dates for the carried forward
amount from the current validity period to the next.
The parameters passed for the customized logic are; Allowance Grouping, payroll area, period
end date for which the carry forward is processed, eligibility calendar type for a particular
employee and reimbursement.
The return parameters expected are; Begin and End date for which the carry forward will be
valid.
Bonus
In this chapter, you make the settings necessary to enable tax deductions for Bonus payments
through off Cycle Payroll.
User Exit: Determine Income Tax Rate on Bonus Paid through O
SAP provides function INBTD for you to determine the tax rate for Income Tax deduction on
Bonus payments. As it may be the case with your organization, that you may want to override the
tax rate determined by the system, SAP provides you with the User Exit EXIT_HINCALC0_008
in the enhancement HRINBTD. This User Exit enables you to determine the tax rate for Income
Tax deductions on Bonus payments through an Offcycle payroll run.
In case the customer exit is not implemented or an error is returned, the SAP standard
computation takes place.
WARNING
You should only carry out this step if both of the following points apply:
The SAP standard processes do not suit your needs
You are a competent ABAP/4 programmer
In this step, you can implement the user exit EXIT_HINCALC0_008 to determine Tax Rate for
Income Tax deduction on Bonus Payment through Offcycle, in accordance with your
requirements.
If you need to implement this user exit, you first create a project for the user exit, then assign the
user exit to your project. Then you write the coding for the user exit, and finally activate the
project.
For general information about user exits, refer to the Enhancements section in the Basis
component documentation in the R/3 library. In addition, there is detailed information about each
user exit that you can access when you assign it to your project.
Requirements
You must have customized the IMG steps:
Payroll India -> Tax -> Tax Liability on Reimbursements Allowances and Perks -> Define Tax
Codes, to create your tax code for Bonus wage types
Payroll India -> Tax -> Tax Liability on Reimbursements Allowances and Perks -> Assign Tax
Code Limits to Wage Types , to assign the Bonus wage type to the created tax code
Payroll India -> Reimbursements Allowances and Perks -> Calculate Eligibility for RAPs, to
assign the Bonus wage type to a 'Pay Scale Grouping for Allowance'
Activities
Start by creating your project:
1. Enter a name for your project.
2. Choose Modification -> Create.
3. Enter a short text for your project and choose Save.
Next assign the user exit to your project:
1. Choose Components.
2. Enter the name(s) of the user exits you want to implement.
Next make your coding modifications:
1. Choose Change.
2. Select the user exit for which you want to write code.
3. Select the corresponding include.
The system will then prompt you to create this include, and you can continue to write your code
in it.
Now activate your project:
1. Return to the initial screen and choose Activate project.
Further Notes
The input parameters passed for the customized logic are:
Personnel Number
Date of off-Cycle Run
Tax Method (Value of first parameter for the function INBTD in the Schema)
Variable CUST_EXIT_VAR, which determines if regular payroll results are available before the
present off-cycle run.
The output parameter generated is Tax Rate, to determine the tax deduction on the Bonus
payment through off cycle.
Housing
In this section of the Implementation Guide (IMG), you make settings that affect the calculation
of tax on accommodation provided by the company or allowances in lieu for housing, during a
payroll run.
House rent allowance is a component paid on a monthly basis to provide for the house rent paid
by the employee. This is a non-statutory allowance whose eligibility amount is based on the Pay
scale grouping for allowances that the employee belongs to Tax exemption on the HRA amount is
based on the actual rent paid and is subject to the location being a metropolitan or non-
metropolitan city.
Company Leased Accommodation (CLA) is a benefit provided to certain ‚Pay scale grouping for
Allowances only. Details maintained to calculate the impact of tax on this benefit are.
Rent paid by the company.
Fair Rent Value (FRV), decided by the local authorities
Helping staff such as a gardener or maid servant provided by the employer
Total value of the company owned furniture provided to the employee
Hiring charges paid, if the furniture is hired from a third party
Company Owned Accommodation (COA) is a benefit provided to certain‚ Pay scale grouping for
allowances only. Details maintained to calculate the impact of tax on this benefit are:
Flat owned by the company is provided to the employee in lieu of HRA.
The FRV as decided by the local authorities
Both COA and HRA are given but the a rent is deducted
Helping staff such as a gardener or maid servant provided by the employer
Total value of the company owned furniture provided to the employee
Hiring charges paid, if the furniture is hired from a third party
Housing
In this section of the Implementation Guide (IMG), you make settings that affect the calculation
of tax on accommodation provided by the company or allowances in lieu for housing, during a
payroll run.
House rent allowance is a component paid on a monthly basis to provide for the house rent paid
by the employee. This is a non-statutory allowance whose eligibility amount is based on the Pay
scale grouping for allowances that the employee belongs to.
Tax exemption on the HRA amount is based on the actual rent paid and is subject to the location
being a metropolitan or non- metropolitan city.
Company Leased Accommodation (CLA) is a benefit provided to certain ‚Pay scale grouping for
Allowances only. Details maintained to calculate the impact of tax on this benefit are.
Rent paid by the company.
Fair Rent Value (FRV), decided by the local authorities
Helping staff such as a gardener or maid servant provided by the employer
Total value of the company owned furniture provided to the employee
Hiring charges paid, if the furniture is hired from a third party
Company Owned Accommodation (COA) is a benefit provided to certain‚ Pay scale grouping for
allowances only. Details maintained to calculate the impact of tax on this benefit are:
Flat owned by the company is provided to the employee in lieu of HRA.
The FRV as decided by the local authorities
Both COA and HRA are given but the a rent is deducted
Helping staff such as a gardener or maid servant provided by the employer
Total value of the company owned furniture provided to the employee
Hiring charges paid, if the furniture is hired from a third party
Define Accommodation Types
In this activity, you have to define a code for Housing Type and then associate it with a taxability
code. The taxability code can be one, which has been pre-defined, or one created by you.
Recommendation
Four pre-configured codes for Housing Type have been provided for you. They are:
Code Housing Type
1 Rented Accommodation
2 Company Leased Accommodation
3 Company Owned Accommodation
4 Own Accommodation
You can create additional codes for Housing Type in the name range 'F' through 'Z'.
Based on the chosen code for housing type, wage type placement or substitution will happen in
Infotype 0008.
The codes for Housing Type will be associated with Tax Codes . This activity can be accessed
from Payroll India -> Tax -> Define Tax Codes.
You must check view V_T7INT7 in TRESC maintenance for:
name space range for taxability codes
creating new taxability codes
When you are creating a taxability code, the consideration should be that at a time an ALGRP
should have only one wage type for a given taxability code.
Further Notes
User Exit: Determine Perk Value for Housing
SAP provides tables for you to calculate perquisites for the Housing benefit. As it may be the
case within your organization that different groupings are used than the default settings, SAP
provides you with the user exit EXIT_HINCALC0_005 in enhancement HRINHRA0. This user
exit enables you to determine all the housing related wage types during payroll run.
In case the customer exit is not implemented or an error is returned, the SAP standard
computation takes place.
To create the user exit, see the instructions below:
WARNING
You should only carry out this step if both of the following points apply:
The SAP standard processes do not suit your needs
You are a competent ABAP/4 programmer
In this step, you can implement the user exit EXIT_HINCALC0_005 to determine the perquisite
value for housing in accordance with your requirements.
If you need to implement this user exit, you first create a project for the user exit, then assign the
user exit to your project. Then you write the code for the user exit, and finally activate the project.
For general information about user exits, refer to the Enhancements section in the Basis
component documentation in the R/3 library. In addition, there is detailed information about each
user exit that you can access when you assign it to your project.
Activities
Start by creating your project:
1. Enter a name for your project.
2. Choose Modification -> Create.
3. Enter a short text for your project and choose Save.
Next, assign the user exit to your project:
1. Choose Components.
2. Enter the name(s) of the user exits you want to implement.
Next make your coding modifications:
1. Choose Change.
2. Select the user exit for which you want to write code.
3. Select the corresponding include.
The system will then prompt you to create this include, and you can continue to write your code
in it.
Now activate your project:
1. Return to the initial screen and choose Activate project.
Further Notes
The input parameters passed for the customized logic are:
COA/CLA Delta Treatment (the CADTR constant from V_T511k)
Begin Date of payroll period
End date of payroll period
Financial Year begin date
Financial year-end date
The output parameters corresponding to the wage types that will be generated are:
Metro HRA Eligibility Monthly (/3R1)
Non Metro HRA Eligibility Monthly (/3R2)
Metro HRA Basis Monthly (/3R3)
Non Metro HRA Basis Monthly (/3R4)
Metro CLA Basis Monthly (/3R5)
Non Metro CLA Basis Monthly (/3R6)
Metro COA Basis Monthly (/3R7)
Non Metro CLA Basis Monthly (/3R8)
Difference in CLA/COA Elig & Rent (/3R9)
Total HRA Exemption (/4E4)
Total CLA & COA Perk (/3RB)
Helper perk (/3RC)
Total furniture perk (/3RD)
Total furniture value (/3RE)
Total Rent paid in CLA (Fin. year) (/3RF)
Total FRV in COA (Fin. year) (/3RG)
Diff. Metro CLA Elig & Rent paid (/3RJ)
Diff. Non Metro CLA Elig & Rent paid (/3RK)
Diff. Metro COA Elig & Rent paid (/3RL)
Diff. Non Metro COA Elig & Rent paid (/3RM)
The changing parameters are 'Update /101,/124 (Y/N?) from difference in eligibility and rent' and
'Update /110 (Y/N?) from difference in eligibility & rent'.
The tables updated in the process are:
House Rent Allowance for Housing(HRA/CLA/COA) details
Income Tax (IT)
Cumulated Results Table (CRT)
IWPBP – Splits in WPBP and HRA/COA/CLA Basis
P0001 for Organisational Assignment Infotype (0001)
User Exit: Screen Validations for Housing Infotype
SAP provides standard validations done in the Process After Input (PAI) module for the Housing
Infotype (0581) Screen 2000 while creating or modifying records. As may be the case within
your organization that different validations may be required, SAP provides you with the user exit
EXIT_MP058100_007 in enhancement HRINHRA1. This user exit enables you to perform
validatations differing from the standard.
Standard validations check for:
Allowance grouping (AlGrp)
Wage type settings for the chosen housing type
The amount for the wagetype thus determined
The validation can result in error category messages which do not allow you to proceed further
untill the conflict is resolved. The exit EXIT_MP058100_007 overrides or sustitutes these
validations checks as implemented. Use this exit to convert the error messages to warning
messages which allow you to proceed further.
In case the customer exit is not implemented or an error is returned, the SAP standard checks
takes place.
To create the user exit, see the instructions below:
WARNING
You should only carry out this step if both of the following points apply:
The SAP standard processes do not suit your needs
You are a competent ABAP/4 programmer
In this step, you can implement the user exit EXIT_MP058100_007 to substitute the validations in
the PAI module hot the Housing Infotype (0581) as per your requirements.
If you need to implement this user exit, you first create a project for the user exit, then assign the
user exit to your project. Then you write the code for the user exit, and finally activate the project.
For general information about user exits, refer to the Enhancements section in the Basis
component documentation in the R/3 library. In addition, there is detailed information about each
user exit that you can access when you assign it to your project.
Activities
Start by creating your project:
1. Enter a name for your project.
2. Choose Modification -> Create.
3. Enter a short text for your project and choose Save.
Next, assign the user exit to your project:
1. Choose Components.
2. Enter the name(s) of the user exits you want to implement.
Next make your coding modifications:
1. Choose Change.
2. Select the user exit for which you want to write code.
3. Select the corresponding include.
The system will then prompt you to create this include, and you can continue to write your code
in it.
1. Return to the initial screen and choose Activate project.
Further Notes
Further Notes
The input parameters passed for the customized logic are:
Personnel Number (PERNR)
Begin Date of the infotype record (BEGDA)
The taxability code for the chosen housing type (TAXCD) from the Define Accommodation
Types (V_T7INR7) view
The output parameters corresponding to the chosen housing type:
The wage type configured for the housing type
Leave Travel
In this section of the Implementation Guide (IMG), you make the settings for leave related
eligibility rules and the rules for tax exemption of Leave Travel Allowance (LTA) during the
payroll run.
LTA is an annual component of any employees' gross salary normally paid against a claim and is
subject to a minimum period of leave taken by the employee.
An employee can claim tax exemption on the LTA amount twice in a fixed block of four years as
specified by the statutory laws, for expenses incurred on vacation travel. If the employee does not
claim the allowed number of exemptions within the specified block of four years, he or she may
carry forward one exemption and claim it in the first year of the next block. If the employee does
not claim this exemption within the first year, the exemption lapses.
The amount exempted may be different from the actual expense incurred as the exemption
depends on factors influenced by mode of travel, class of travel, shortest route and other norms as
prescribed by the Income Tax department.
To set up this component, you:
Maintain minimum leave eligibility period for leave travel allowance
Example
Scenario one:
Mr. Rao undertakes a journey from Bangalore to Delhi with one stopover at Mumbai. He flies
from Bangalore to Mumbai by business class and flies from Mumbai to Delhi by economy class.
Mr. Rao will receive Tax exemption only on the cost of economy class airfare (on a national
carrier) on the shortest route between Bangalore and Delhi.
Scenario two:
As specified by the Income Tax department, the current block of four years is from 1998-2001.
Mr. Rao has carried forward a journey from the previous block (1994-1997) as he did not claim
exemption on two journeys. The number of journeys on which he can claim exemption for, in the
current block is 3 (as one is carried forward from the previous block). If Mr. Rao does not
undertake a journey in the first year of the current block (i.e. 1998), then the journey that he had
carried forward lapses and leaves him with two journeys on which he can claim exemption.
Maintain Minimum Eligibility Period for Leave Travel Allowance.
In this activity you set the minimum number of days on which the employee must be on leave, to
claim exemption on the tax payable for the Leave Travel Allowance (LTA) amount. The
employer defines the number of eligibility days.
Activities
1. Enter the employee subgroup grouping for Collective Agreement Provision in the AlGrp field.
2. Enter the the attendance or absence type in the A/A Type field.
3. Enter the minimum number of days of leave to be taken in the NoDysLeave field.
4. Select the calculation method in the CntgMethod field
5. Save your entries
Car and Conveyance
In this section of the Implementation Guide (IMG), you set up the benefit of a company car being
provided to the employee. The company car could be provided for employee's use with or without
the provision to transfer the ownership of the car to the employee at the end of a specified period.
The benefit of a Company provided car is provided to employees for official use. Company cars
are also provided for the personal use of the employee where a perquisite value is attached to the
use of the car based on the horsepower of the car and the extent of benefit provided to the
employee. If the employee is provided with a driver for a car an additional perquisite value is
added for the driver. The perquisite values attached are fully taxable and added to the gross
salary.
The allowance or reimbursements for conveyance is a separate amount given to all employees to
commute to office but the eligibility for the allowance varies if the employee uses a company
provided car.
To set up this component, you:
1. Define the eligibility criteria for a Company owned car and Own your car schemes
2. Assign eligibility amounts for conveyance
3. Assign a perquisite value for the vehicle and for the benefit of a driver
Define Vehicle Details
In this activity, you define details of the vehicle such as the type of car and its horsepower.
Activities
1. Enter the type of car in the Car type field.
2. Enter a description for the car in the Car description field.
3. Enter horsepower value of the car in the Car HP field.
4. Save your entries
Define Conveyance Types
In this activity, you define a code for Conveyance Type.
Recommendation
Six pre-configured codes for Conveyance Type have been provided for you. They are:

Code Conveyance Type

Availing COCS (company
1
owned car scheme)
Availing OYCS (own your
2
car scheme)
Availing Company
3
Transport
4 Own Two Wheeler
5 Own Two Wheeler
6 No Vehicle
You can create additional codes for Conveyance Type in the name
range 'F' through 'Z'.
Based on the chosen code for Conveyance Type, wage type placement
or subsitution will happen in Infoype 0008.
The codes for Conveyance Type will be associated with Tax Codes .
This activity can be accessed from Payroll India -> Tax -> Define
Tax Codes.
You must check view V_T7INT7 in TRESC maintenance for:

name space range for taxability codes creating new taxability codes
When you are creating a taxability code, the consideration should be that a t a time an ALGRP
should have only one wage type for a given taxability code.
Further Notes
In case of new rule based taxability codes, a new payroll function may be required
Define Amounts and Numbers for Car Schemes
In this activity, you maintain details about the employees' entitlement to a company-owned car.
For each allowance group, you define the total value of the car and the numbers of cars
employees in the group are entitled to.
Activities
1. Enter the allowance group in the AllGrp field.
2. Select the type of car scheme eligible for the group in the Car scheme field
3. Enter the number of cars the employee is eligible for in the No of cars field.
4. Enter the maximum value of the car for which the employee is eligible in the Amt limit field.
5. Select the currency in the Currency field.
6. Enter the start and end dates for the period.
7. Save your entries.
Assign Type and Age of Car for Car Schemes
In this activity, you associate a car scheme and other vehicle details to an allowance grouping.
This information is used to identify the eligibility criteria for a group of employees.
Activities
1. Enter a grouping for car schemes in the AlGrp field.
2. Select the type of scheme applicable to the grouping in the Car scheme field.
3. Select the type of car applicable to the grouping in the Car type field.
4. Enter the age of the car in the Car age field.
5. Enter the start and end dates for the period.
6. Save your entries.
Assign Eligibility Criteria for Conveyance Allowance
In this activity, you assign wage types used to calculate eligibility amounts for conveyance and
the type of vehicle to an allowance grouping. These inputs are used to calculate the eligible
amounts payable to employees who belong to the respective allowance grouping.
Activities
1. Enter the allowance group in the AlGrp field.
2. Enter the type of vehicle used by the employee in the Vehicle type field.
3. Enter the wage type to calculate amounts for conveyance in the Wage type field.
4. Enter the start and end dates for the period.
5. Save your entries.
Assign Eligibility Criteria for Conveyance Allowance
In this activity, you assign wage types used to calculate eligibility amounts for conveyance and
the type of vehicle to an allowance grouping. These inputs are used to calculate the eligible
amounts payable to employees who belong to the respective allowance grouping.
Activities
1. Enter the allowance group in the AlGrp field.
2. Enter the type of vehicle used by the employee in the Vehicle type field.
3. Enter the wage type to calculate amounts for conveyance in the Wage type field.
4. Enter the start and end dates for the period.
5. Save your entries.
Assign Eligibility Criteria for Conveyance Allowance
In this activity, you assign wage types used to calculate eligibility amounts for conveyance and
the type of vehicle to an allowance grouping. These inputs are used to calculate the eligible
amounts payable to employees who belong to the respective allowance grouping.
Activities
1. Enter the allowance group in the AlGrp field.
2. Enter the type of vehicle used by the employee in the Vehicle type field.
3. Enter the wage type to calculate amounts for conveyance in the Wage type field.
4. Enter the start and end dates for the period.
5. Save your entries.
Long Term Reimbursements
In this section of the Implementation Guide (IMG), you make the settings that affect the
calculation of the Hard Furnishing Scheme allowance and its taxation during a payroll run.
Hard Furnishing Scheme (HFS) is a non-statutory component of an employees gross salary,
provided to an employee for acquiring movable capital items or household furnishings like fridge,
washing-machine and so on. The eligibility criteria for HFS are based on the rules maintained in
the step Reimbursements Allowances and Perks -> Maintain Allowance Rules for Pay Scale
Groupings.
Under this scheme an employee is eligible for furnishings worth a specific amount for a fixed
period of time, as per the company policies. If the employee does not use the entire amount
within the time period, the unused amount is not paid to the employee.
Employees who benefit from this scheme are liable for tax on the total value of furnishings
purchased in the financial year. To arrive at the annual gross salary, a perquisite value is
calculated based on the cost of assets and the dates of purchase. If the employment is terminated
or the validity period expires, the employee buys back the assets at nominal value specified by the
company.
To set up this component, you:
1. Maintain the number of years of validity of HFS
Maintain block of years for Long Term Reimbursements
In this activity, you maintain the feature IN590 wherein, you set the period of validity for Hard
Furnishing Scheme (HFS) based on the company policies.
Validity for HFS can be set in two ways:
Fixed block of years
Fixed end date
Retirement Benefits
In this section of the Implementation Guide (IMG), you make settings that define the employer's
contributions towards funds that support the employee's retirement plan.
You set up the statutory and non-statutory components of Gratuity and Superannuation
respectively, where you maintain the company rates as necessary.
Maintain Gratuity Trust ID
In this activity, you define the different Gratuity trusts maintained by your company.
Activities
1. Enter a four digit alphanumeric code for each Gratuity trust in the GRA ID field.
2. Enter a decrption for the trust in the Text field.
3. Save your entries.
Maintain Gratuity Contrib. Freq. and Related Wage Types
In this activity, you define
whether the contribution to the gratuity trust is to be made annually or monthly
whether the annual contribution is to be made at the end of the financial year or calendar year
the wage type for gratuity contributions made on a monthly basis
the wage type for gratuity contributions made on an annual basis
the wage type used to calculate the provisional monthly gratuity contributions, in case the
contribution to the trust is made annually. This wage type needs to be defined only if provisional
wage types per month needs to be calculated and posted to a provisional account.
Requirements
You must have defined the different gratuity trusts maintained by your company.
Activities
1. Select Edit -> New entries.
2. Enter the gratuity trust code defined by you earlier in the GRA ID field
3. Enter whether the contribution to the gratuity trust is to be made annually or monthly in the
Frequency contribution field.
4. Enter whether the annual contribution is to be made at the end of the financial year or calender
year in the Monthly contribution field.
5. Enter the wage type for gratuity contributions made on a monthly basis in the Monthly WT
field.
6. Enter the wage type for gratuity contributions made on an annual basis in the Annual WT field
7. Enter the wage type used to calculate the provisional monthly gratuity contributions, in case
the contribution to the trust is made annually, in the Prov. WT field.
8. Select Table view -> Save.
Maintain Gratuity Contrib. Freq. and Related Wage Types
In this activity, you define
whether the contribution to the gratuity trust is to be made annually or monthly
whether the annual contribution is to be made at the end of the financial year or calender year
the wage type for gratuity contributions made on a monthly basis
the wage type for gratuity contributions made on an annual basis
the wage type used to calculate the provisional monthly gratuity contributions, in case the
contribution to the trust is made annually. This wage type needs to be defined only if provisional
wage types per month needs to be calculated and posted to a provisional account.
Requirements
You must have defined the different gratuity trusts maintained by your company.
Activities
1. Select Edit -> New entries.
2. Enter the gratuity trust code defined by you earlier in the GRA ID field
3. Enter whether the contribution to the gratuity trust is to be made annually or monthly in the
Frequency contribution field.
4. Enter whether the annual contribution is to be made at the end of the financial year or calender
year in the Monthly contribution field.
5. Enter the wage type for gratuity contributions made on a monthly basis in the Monthly WT
field.
6. Enter the wage type for gratuity contributions made on an annual basis in the Annual WT field
7. Enter the wage type used to calculate the provisional monthly gratuity contributions, in case
the contribution to the trust is made annually, in the Prov. WT field.
8. Select Table view -> Save.
Define Contribution Rates for Gratuity
In this activity, you define the contribution rates used to calculate the gratuity contributions made
by the employer.
These company-specific rules are linked to gratuity funds and enable the system to calculate and
store gratuity amounts during the payroll run.
Requirements
You must have created pay scale groupings for allowances in the activities under the step Pay
scale Groupings.
Activities
To set up the company rules for gratuity, you
1. Select the appropriate grouping for allowance in the All. group field.
2. Enter gratuity trust identification number of the trust in the Gra ID field.
3. Enter the employer's percentage of contribution for gratuity in the GA contrib field.
4. Enter the start and end dates for the period

Maintain the Eligibility Years for Gratuity

In this step, you maintain the 'GRTYR' constant for contribution to gratuity. The minimum
number of years of service after which the employer begins to contribute towards gratuity is
specified here.
Activities
The SAP constant 'GRTYR' is associated with a date range.
Enter the minimum number of years of employment to be eligible for this benefit in the Value
field.
Check for Gratuity Contribution
In this activity, you modify the personnel calculation rule for Payroll Accounting to identify
whether gratuity contribution took place.
This rule is used in conjunction with a IF statement. It passes a TRUE or FALSE value based on
which the IF loop is processed.
In the retro scenario certain processing need to happen based on whether the employee has
contributed to gratuity or not.
This rule first reads the amount of the gratuity monthly contribution wage type /3G1 from IT and
passes False if amount is greater than zero, otherwise it reads the amount of the gratuity
provisional contribution wage type /3G3 from IT and passes False if amount is greater than zero
and True if otherwise.
Requirements
The wage types used in the rule /3G1 and /3G3 are entries in table T7ING5. Thus if this table
changes, then the rule also will have to be changed.
If entries are added in table T7ING5, then the corresponding wage types for monthly and
provisional contribution should also be added in the Rule.
Further Notes
See Also
PC Rule IN50
PC Rule INPF
Maintain Wage types to be Passed During Retro Runs
This rule is processed only during a retro scenario for employees who had contributed towards
gratuity before and need not contribute as of the retro month.
Thus the contribution, which has already happened, is brought forward to the period being
processed so that the FI/CO posting is not affected.
The relevant wage types for gratuity contribution are pushed into IT from ORT.
Further Notes
See Also
PC Rule IN48
PC Rule INES
Maintain Superannuation Trust ID
In this activity you define the different Superannuation trusts maintained by your company.
Activities
1. Enter a four digit alphanumeric code for each Superannuation trust in the SAN ID field.
2. Enter a decrption for the trust in the Text field.
3. Save your entries.
Maintain Superannuation Contrib. Freq and Rel. Wage Types
In this activity, you define:
whether the contribution to the superannuation trust is to be made annually or monthly.
whether the annual contribution is to be made at the end of the financial year or calendar year.
the wage type for superannuation contributions made on a monthly basis.
the wage type for superannuation contributions made on an annual basis.
the wage type used to calculate the provisional monthly superannuation contributions, in case the
contribution to the trust is made annually. This wage type needs to be defined only if provisional
wage types per month need to be calculated and posted to a provisional account.
Requirements
You must have defined the different superannuation trusts maintained by your company.
Activities
1. Select Edit -> New entries.
2. Enter the superannuation trust code defined by you earlier in the SAN ID field
3. Enter whether the contribution to the superannuation trust is to be made annually or monthly in
the Freq contr field.
4. Enter whether the annual contribution is to be made at the end of the financial year or calender
year in the Mnth contr field.
5. Enter the wage type for superannuation contributions made on a monthly basis in the Monthly
WT field.
6. Enter the wage type for superannuation contributions made on an annual basis in the Annual
WT field
7. Enter the wage type used to calculate the provisional monthly superannuation contributions, in
case the contribution to the trust is made annually, in the Prov. WT field.
8. Select Table view -> Save.
Define Contribution Rates for Superannuation
In this activity, you:
Define the contribution rates used to calculate superannuation contributions made by the
employer
Enter the company-specific data
These rates are linked to superannuation funds and enable the system to calculate and store
superannuation amounts during the payroll run.
Requirements
You must have created pay scale groupings for allowances in the activities under the step Pay
scale Groupings.
Activities
To set up the company rules for Superannuation, you
1. Enter the relevant country grouping in the Ctry Grpg field.
2. Enter superannuation trust identification number of the trust in the San ID field.
3. Select the appropriate grouping for allowance in the All. group field.
4. Enter the employer’s percentage of contribution for superannuation in the SA contrib field.
5. Enter the start and end dates for the period.
6. Save your entries.
Maintain Eligibility Details for Superannuation
In this activity, you set up the eligibility details for superannuation. This is used to set the criteria
on which the employee and employer contribute to the superannuation fund and it's relevant tax
implications.
Activities
Specify the appropriate return value for the feature based on what the employee is eligible for.
Check for Superannuation Contributions
In this activity, you modify the INSN Personnel calculation rule for Payroll Accounting to check
whether superannuation contribution took place.
This rule is used in conjunction with IF statement. It passes a TRUE or FALSE value based on
which the IF loop is processed.
In the retro scenario certain processing need to happen, based on whether the employee has
contributed to superannuation or not.
This rule first reads the amount of the superannuation monthly contribution wage type /3S1 from
IT and passes False if amount is greater than zero, otherwise it reads the amount of the
superannuation provisional contribution wage type /3S3 from IT and passes False if amount is
greater than zero and True if otherwise.
Requirements
The wage types used in the rule /3S1 and /3S3 are entries in table T7INS5. Thus if this table
changes, then the rule also will have to be changed.
If entries are added in table T7INS5, then the corresponding wage types for monthly and
provisional contribution should also be added in the Rule.
See also
PC Rule IN50
PC Rule INPF
PC Rule INGR
Maintain Wagetypes to be passed During Retro Runs
This rule is processed only during a retro scenario for employees who had contributed towards
superannuation before and need not contribute as of the retro month.
Thus the contribution which has already happened is brought forward to the period being
processed so that the FI/CO posting is not affected.
The relevant wage types for gratuity contribution are pushed into IT from ORT.
See also
PC Rule IN48
PC Rule INES
PC Rule IN51
Statutory Social Contribution
In this section of the Implementation Guide (IMG), you set up the statutory components which
are contributed by the employee and the employer, which affect the calculation of tax during a
payroll run.
Define Trust Details for Provident Fund
In this activity, you define the different Provident Fund (PF) trusts that the employer and
employee contribute to, and set the wage types used to calculate contributions made to the trusts
and it's associated handling charges.
Activities
1. Enter an alphanumeric value to define the trust in the Trust field.
2. Enter a name to identify the defined trust in the Trust Name field.
3. Select the type of trust the company contributes to in the Trust Type field.
4. Enter the wage type used to calculate the employee’s statutory minimum contribution to PF in
the EEPFC WT field.
5. Enter the wage type used to calculate the employee’s voluntary contribution to PFin the
EEVPF WT field.
6. Enter the wage type used to calculate the employer’s contribution to PF in the ERPFC WT
field.
7. Enter the wage type used to calculate the employer’s contribution towards pension in the
ERPNC WT field.
8. Enter the wage type used to calculate the employer’s contribution to EDLI in the EDLIC WT
field.
9. Enter the wage type used to calculate the employer’s contribution to EDLI administrative
charges in the EDLIA WT field.
10. Enter the wage type used to calculate the employer’s contribution to PF administrative
charges in the PFADM WT field.
11. Save your entries.
Assign Company Rates for Provident Fund
In this activity, you assign the company rates for contribution towards Provident Fund. This is a
non-statutory rate and can be any amount that is equal to or greater than the statutory rate.
Activities
1. Select the appropriate grouping for allowance in the All. group field.
2. Enter the start and end dates for the period.
3. Enter the employers percentage of contribution towards PF in the ErCtr field.
4. Save your entries.
Define PF Trust Validity Period
In this activity you define the Provident Fund (PF) trusts applicable to the company. The
provident fund trusts defined in this step are used as a basis for selection in the infotype (587)
Provident Fund Contributions.
Activities
1. Enter the PF trust associated with the company in the Trust field.
2. Enter the start and end dates of validity.
3. Enter the percentage of interest offered by the trust in the Trust int. field.
4. Indicate if the company contributes to EDLI and it's administrative charges in the EDLI Payee
field.
5. Save your entries.
Maintain Contribution Details for Provident Fund
This feature returns Provident Fund (PF) contribution type, PF Ref Number and Pension Ref
Number based on the employee's personnel area, personnel subarea and PF trust ID.
Use
This is used in payroll as well as reports.
Example
PF processing is based on the return values. For example, if the contribution type is '1', then it
means that it is a notified establishment and percentage of contribution would be 12 %. If the
contribution type is '2', then it means that it is a non-notified establishment and percentage of
contribution would be 10 %.
Activities
This feature can be called from programs and uses the return values for
PF processing and reporting.
Define Contribution type for Statutory rates for Provident F
name range A to Z. For every Contribution type, you must also specify percentages for:
Employee Contribution
Employer Contribution
Employer Pension Contribution
PF Admin Charges
EDLI Contribution
EDLI Admin
PF Interest