Practical SAP US Payroll (2nd Edition)

Practical SAP US Payroll (2nd Edition)

2012
978-1-59229-421-3
456

Product Details

• A complete guide to the tax structures, schemas, and rules that drive US Payroll processing logic
• Integrate your organization’s payroll with benefits, taxes, and accounting
• Master advanced topics, such as overpayments, accruals, payroll interfaces, garnishments, and more

When it comes to setting up, configuring, or using SAP US Payroll in your HR processes, small details can have big ramifications. Get the tools you need to get up to speed on payroll implementation and cutover, time  management integration, and troubleshooting payroll issues. This book’s balanced coverage of payroll processes, configuration, and real-life scenarios will help you develop valuable, applicable skills.

Uncover the Secrets of Schemas and Rules
Explore the functions and operations of important schemas, such as US Payroll schema U000, and learn how to write simple and complex rules.

Deconstruct a Paystub
Walk through the elements of a typical US paystub and identify the characteristics, processing classes, and other wage type configuration attributes that shape it.

Understand Benefits Integration
Learn how to handle health plans, insurance plans, and savings plans and identify where US Payroll and US Benefits functionalities overlap.

Master Time Management
Integrate your US Payroll system with SAP or third-party time management solutions to compensate for overtime, shift differentials, paid and unpaid time, and other time-related challenges.

Avoid Implementation Pitfalls
Anticipate challenges that arise during the implementation lifecycle by embracing best practices for cutover, implementation, and post-go-live.

Highlights

• Employee master data
• Payments and deductions
• Wage types
• US Payroll schemas
• Benefits integration
• Time management
• Tax reporting and processing

The Author

Satish Badgi has been involved in full lifecycle implementations of SAP HCM/Payroll for over 15 years. He conducts training courses for customers in the HCM and Payroll areas, and writes for the “HRExpert” newsletter and the SAPTips community.

Table of Contents 

  • ... Preface ... 15
  • 1 ... Objectives and Purpose ... 23
  • 1.1 ... What Makes US Payroll Unique? ... 24
  • 1.1.1 ... Functional Uniqueness ... 24
  • 1.1.2 ... Technical Uniqueness ... 27
  • 1.2 ... The US Payroll Process ... 29
  • 1.3 ... Components of SAP US Payroll ... 30
  • 1.4 ... Summary ... 32
  • 2 ... US Payroll Infotypes: Master Data and Transaction Data ... 33
  • 2.1 ... Master Data: Conceptual Clarity ... 33
  • 2.2 ... Retroactive Accounting ... 34
  • 2.3 ... Employee Master Data for US Payroll ... 36
  • 2.3.1 ... Infotype 0007: Work Schedules ... 40
  • 2.3.2 ... Infotype 0008: Basic Pay ... 40
  • 2.3.3 ... Infotype 0009: Bank Details ... 41
  • 2.3.4 ... Infotype 2010: Employee Remuneration ... 42
  • 2.3.5 ... Infotype 0207: Residence Tax ... 43
  • 2.3.6 ... Infotype 0208: Work Tax ... 43
  • 2.3.7 ... Infotype 0167: Health Plans ... 44
  • 2.3.8 ... Infotype 0057: Membership Fees ... 44
  • 2.4 ... Employee Transaction Data: US Payroll ... 45
  • 2.4.1 ... Infotype 0014: Earnings/Deductions Transaction Data ... 49
  • 2.4.2 ... Infotype 0169: Savings Plans ... 50
  • 2.4.3 ... Infotype 0015: Additional Payments and Deductions ... 50
  • 2.4.4 ... Infotype 0267: Bonus and Off-Cycle ... 51
  • 2.4.5 ... Infotype 0011: External Bank Transfer ... 52
  • 2.4.6 ... Infotype 0210: Changes to W-4 Data ... 53
  • 2.4.7 ... Infotype 0234: Additional Withholding Info ... 53
  • 2.4.8 ... Infotype 0235: Other Taxes ... 54
  • 2.4.9 ... Infotype 0554: Hourly Rate Per Assignment ... 55
  • 2.4.10 ... Infotype 0027: Cost Center Distribution ... 55
  • 2.5 ... Pre-Payroll Data Verification ... 56
  • 2.6 ... Summary ... 59
  • 3 ... Wage Types ... 61
  • 3.1 ... Overview of a U.S. Paystub and the Concept of Wage Types ... 61
  • 3.2 ... Lifecycle of a Wage Type and U.S. Wage Type Catalog ... 64
  • 3.2.1 ... Wage Type Categories ... 68
  • 3.2.2 ... Three Elements of a Wage Type ... 69
  • 3.2.3 ... Wage Type Catalog ... 71
  • 3.2.4 ... Wage Type Tables ... 74
  • 3.3 ... Step-by-Step Configuration of a Wage Type ... 74
  • 3.3.1 ... Earnings ... 75
  • 3.3.2 ... Deductions ... 83
  • 3.3.3 ... Taxes ... 89
  • 3.3.4 ... Net Pay ... 93
  • 3.3.5 ... Wage Type Configuration Tool ... 95
  • 3.4 ... Testing Wage Types ... 97
  • 3.5 ... Advanced Topics on Wage Types ... 101
  • 3.5.1 ... Handling Cumulations ... 101
  • 3.5.2 ... Setting Up Payment Models ... 103
  • 3.5.3 ... Priority and Arrears ... 104
  • 3.5.4 ... Posting of Wage Types ... 109
  • 3.5.5 ... Valuation of Wage Types ... 122
  • 3.6 ... Summary ... 123
  • 4 ... Schemas and Rules ... 125
  • 4.1 ... Examining the U.S. Payroll Driver (RPCALCU0) ... 125
  • 4.2 ... Working with U.S. Schema U000 ... 127
  • 4.2.1 ... Schemas ... 130
  • 4.2.2 ... Subschemas ... 130
  • 4.2.3 ... U.S. Subschemas ... 132
  • 4.3 ... Why, When, and How to Change the U.S. Schema ... 143
  • 4.3.1 ... Copy and Modify Schema U000 using the Schema Editor ... 145
  • 4.3.2 ... Running an Error-Free Schema ... 147
  • 4.4 ... Overview of the U.S. Public Sector Schema Functionality ... 152
  • 4.4.1 ... NRA: Non-Resident Alien Processing ... 153
  • 4.4.2 ... Savings Bonds Processing ... 154
  • 4.4.3 ... Public Sector Savings Plans: 403(B), 457(B) ... 154
  • 4.4.4 ... Employer Benefits and Tax Allocation Rules ... 155
  • 4.5 ... Overview of Non-Profit Organization (NPO) Payroll ... 155
  • 4.6 ... Writing Rules in US Payroll ... 156
  • 4.6.1 ... The Rules Editor ... 157
  • 4.6.2 ... Creating Simple Rules ... 159
  • 4.6.3 ... Creating Complex Rules ... 162
  • 4.6.4 ... Running Error-Free Rules ... 170
  • 4.7 ... Summary ... 173
  • 5 ... Benefits Integration ... 175
  • 5.1 ... Integration of US Benefits with US Payroll ... 175
  • 5.1.1 ... Input ... 176
  • 5.1.2 ... Processing ... 177
  • 5.1.3 ... Output ... 177
  • 5.2 ... Health Plan Integration ... 179
  • 5.3 ... Savings Plan Integration ... 183
  • 5.4 ... Insurance Plan Integration ... 190
  • 5.5 ... Flexible Spending Account Integration ... 195
  • 5.6 ... Sending Data and Remittance to Benefits Providers ... 197
  • 5.6.1 ... Health Plans ... 197
  • 5.6.2 ... Insurance Plans ... 198
  • 5.6.3 ... Savings Plans ... 198
  • 5.6.4 ... Sending Remittance ... 198
  • 5.6.5 ... Sending Data ... 199
  • 5.7 ... Summary ... 199
  • 6 ... Time Management and Payroll Integration ... 201
  • 6.1 ... Definitions ... 201
  • 6.2 ... Time-Payroll Integration Infotypes ... 204
  • 6.3 ... Time and Payroll Integration Scenarios ... 205
  • 6.3.1 ... Scenario 1: SAP CATS + SAP Time Evaluation + SAP Payroll ... 207
  • 6.3.2 ... Scenario 2: External Time Clocking + External Time Evaluation + SAP HCM and SAP Payroll ... 210
  • 6.3.3 ... Scenario 3: External Time Clocking + SAP HCM and SAP Time Evaluation + SAP Payroll ... 212
  • 6.3.4 ... Scenario 4: External Time Clocking + SAP CATS and SAP Time Evaluation + SAP Payroll ... 214
  • 6.4 ... Challenges of Time Integration with Payroll ... 214
  • 6.4.1 ... Using Custom Infotypes ... 214
  • 6.4.2 ... Override Jobs ... 215
  • 6.4.3 ... Override Cost Centers ... 215
  • 6.4.4 ... Reconciliation Between External Time Clocking and SAP Payroll ... 216
  • 6.5 ... Time Schemas ... 217
  • 6.6 ... FLSA and Rate Calculation Impact ... 219
  • 6.6.1 ... Minimum Wage ... 220
  • 6.6.2 ... Overtime ... 220
  • 6.6.3 ... Tracking of Hours Worked and Record-Keeping ... 220
  • 6.7 ... Summary ... 221
  • 7 ... Garnishments ... 223
  • 7.1 ... Configuring Garnishments ... 224
  • 7.2 ... Disposable Net Income ... 228
  • 7.2.1 ... Definition of Disposable Net Income ... 228
  • 7.2.2 ... Example ... 230
  • 7.3 ... Managing Wage Types for Garnishments ... 232
  • 7.3.1 ... Garnishment Deduction Wage Types ... 232
  • 7.3.2 ... Impact of Other Wage Types ... 233
  • 7.4 ... Garnishment Subschema ... 233
  • 7.4.1 ... Rule UGIT ... 234
  • 7.4.2 ... Rule UGDN ... 236
  • 7.4.3 ... Function UGARN ... 238
  • 7.5 ... Summary ... 239
  • 8 ... Tax Processing ... 241
  • 8.1 ... Introduction to U.S. Tax Processing ... 241
  • 8.1.1 ... Tax Infotypes ... 242
  • 8.1.2 ... Earnings and Deductions ... 244
  • 8.1.3 ... Relevant Processing Classes for Wage Types ... 245
  • 8.2 ... Tax Models ... 247
  • 8.2.1 ... Tax Authorities ... 247
  • 8.2.2 ... Tax Areas ... 248
  • 8.2.3 ... Tax Types ... 249
  • 8.2.4 ... Tax Classes ... 250
  • 8.2.5 ... Tax Models ... 250
  • 8.3 ... Year-End Tax Adjustments and Workbench ... 255
  • 8.3.1 ... Starting the Year-End Workbench ... 257
  • 8.3.2 ... Running Payroll ... 262
  • 8.3.3 ... Verification ... 264
  • 8.4 ... Overview of the Tax Reporter ... 265
  • 8.4.1 ... Preparation Work ... 265
  • 8.4.2 ... Quarterly Reports ... 266
  • 8.4.3 ... Annual Reports ... 268
  • 8.5 ... Tax Services ... 270
  • 8.6 ... BSI Tax Factory ... 271
  • 8.6.1 ... Installing BSI Tax Factory 9.0 ... 272
  • 8.6.2 ... Configuration of SAP for BSI ... 273
  • 8.6.3 ... How to Apply BSI TUBS ... 274
  • 8.6.4 ... Tax Locator ... 274
  • 8.6.5 ... Handling Reciprocity ... 275
  • 8.7 ... Summary ... 277
  • 9 ... Advanced Topics ... 279
  • 9.1 ... Overpayments and Claims Handling ... 279
  • 9.1.1 ... Why Claims Are Generated ... 280
  • 9.1.2 ... Identifying Claims in Payroll ... 282
  • 9.1.3 ... Strategy with Claims ... 284
  • 9.1.4 ... Clearing Claims: Payroll-Forgiven ... 284
  • 9.1.5 ... Clearing Claims: Payroll-Not-Forgiven ... 285
  • 9.1.6 ... Clearing Claims: Accounts Taxes (Employee Pays Single Check) ... 286
  • 9.1.7 ... Clearing Claims: Accounts Taxes (Employee Pays by Payment Plan) ... 288
  • 9.2 ... New Overpayments Functionality ... 290
  • 9.2.1 ... Differences Between Old and New Functionality ... 290
  • 9.2.2 ... Running New Overpayments Functionality ... 292
  • 9.3 ... Accruals ... 298
  • 9.3.1 ... Accruals Configuration ... 299
  • 9.3.2 ... Accruals Process and Posting ... 302
  • 9.4 ... Interfacing with Third-Party Payroll Systems: Gross to Net ... 306
  • 9.5 ... Third-Party Remittance (Accounts Payable Processing) ... 312
  • 9.5.1 ... Required Configuration ... 313
  • 9.5.2 ... Financial Account Management ... 314
  • 9.5.3 ... Running a Third-Party Process ... 316
  • 9.6 ... Expatriate Payroll ... 319
  • 9.6.1 ... Scenario 1: Payroll in SAP US Payroll for an Expatriate ... 319
  • 9.6.2 ... Scenario 2: Payroll in SAP US Payroll and SAP Germany Payroll for an Expatriate ... 320
  • 9.7 ... Implementation Tips for US Payroll ... 321
  • 9.7.1 ... Go-Live Calendar ... 321
  • 9.7.2 ... Volumes and Complexity ... 323
  • 9.7.3 ... Resource Planning and Knowledge Transfers ... 323
  • 9.8 ... Summary ... 324
  • 10 ... Cutover, Implementation, and Post-Go-Live ... 325
  • 10.1 ... Implementation Lifecycle ... 325
  • 10.1.1 ... Structure to Discuss Payroll Implementation and Cutover ... 326
  • 10.1.2 ... Implementation Challenges for Payroll ... 327
  • 10.2 ... Cutover Planning ... 331
  • 10.2.1 ... Configuration Teams ... 332
  • 10.2.2 ... Payroll Operations ... 333
  • 10.2.3 ... Interface Management ... 333
  • 10.2.4 ... Training and Change Management ... 334
  • 10.2.5 ... Finance and Other Integrated Applications ... 335
  • 10.2.6 ... Security and Roles ... 335
  • 10.2.7 ... Legacy Teams ... 335
  • 10.2.8 ... Technical Teams ... 336
  • 10.3 ... Typical Cutover Plan ... 336
  • 10.3.1 ... Step 1: Pre-Cutover Activities and Tasks ... 337
  • 10.3.2 ... Step 2: Cutover of Configuration ... 337
  • 10.3.3 ... Step 3: Conversions ... 338
  • 10.3.4 ... Step 4: Business Cutover ... 339
  • 10.3.5 ... Step 5: Go-Live ... 340
  • 10.3.6 ... Step 6: Post-Go-Live ... 341
  • 10.3.7 ... Typical Implementation Challenges ... 341
  • 10.4 ... Testing ... 342
  • 10.4.1 ... System Integration Test ... 343
  • 10.4.2 ... Parallel Testing ... 345
  • 10.5 ... Post-Go-Live Challenges for Payroll ... 352
  • 10.5.1 ... Housekeeping Activities ... 355
  • 10.5.2 ... Best Practices to Maintain Wage Types, Schemas, and Rules ... 358
  • 10.6 ... Summary ... 359
  • ... Appendices ... 361
  • A ... US Payroll Schema U000 ... 363
  • B ... Wage Type Template ... 375
  • B.1 ... Part 1: To Be Completed by Requestor ... 375
  • B.2 ... Part 2: To Be Completed by Person Configuring ... 376
  • B.3 ... Approvals and Testing ... 378
  • C ... Commonly Used Technical Wage Types ... 379
  • D ... Commonly Used Model Wage Types ... 409
  • E ... Commonly Used Processing Classes and Specifications ... 427
  • F ... Useful Payroll Operations ... 439
  • G ... The Author ... 449
  • ... Index ... 451