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Notice Period Configuration

former_member568294
Participant
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Hi Friends,

We are trying to configure Notice Period in SAP system. There are two points in configuring the same in the system. They are

1) Employee resigned the organization on a date & served 3 months notice period  - Full & Final Settlement

2) Suppose Employee served 2 months Notice Period & planned to buy 1 month (Basic Pay as a recovery for that month).

Can any one of you please suggest me that how we can do this in the system & get Full & Final Settlement amount in payslip?

Thanks & Regards,

Sreekanth

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Answers (2)

Answers (2)

former_member568294
Participant
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Hi Venkat,

Thanks for your reply. Can you please let me know the steps in details? I mean configuration wise....like IT0041 (Date Specifications that we have to maintain) or IT0016 (Contract Elements need to be maintained). Kindly let me know the process in detail please..

Thanks & Regards,

Sreekanth

venkat_polisetty
Active Contributor
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Hi Sreekanth,

This Notice pay calculation we can do through Termination workbench.

This process describes the Termination Workbench configurations.

For example, configurations for calculation of Notice Pay by the Termination Workbench.


Prerequisites

You have maintained the details of the employment contract in the Contract Elements infotype (0016), including thePeriod of Notice .

Notice Pay
  1. Set the Pay Scale Grouping for Allowances to Indirect Evaluation A for the Notice Pay wage type (MN00). You can do so in the IMG under Start of the navigation path Payroll India Next navigation stepReimbursements, Allowances and Perks Next navigation stepMaintain Wage Type Characteristics End of the navigation path . Termination Workbench uses this wage type as the basis for calculation of Notice Pay .
  2. Set the components for the Notice Pay basis salary in the IMG under Start of the navigation path Payroll India Next navigation stepReimbursements, Allowances and Perks Next navigation stepMaintain Pay Scale Groups and Levels End of the navigation path
  3. Set the RAP Indicator in the table view Reimbursement allowances perks - eligibility and calculation(V_T7INA9) to Notice Pay . You can do so in the IMG under Start of the navigation path Payroll India Next navigation stepReimbursements, Allowances and Perks Next navigation stepCalculate Eligibility for RAP. End of the navigation path
  4. Specify the method of Notice Pay computation in the IMG under Start of the navigation path Payroll India Next navigation stepTermination Workbench Next navigation stepCalculation Method for Notice Pay End of the navigation path .Termination Workbench calculates the Notice Pay for the employee using one of the following methods:Termination Workbench separately computes the prorated Notice Pay amount for every month remaining in the Notice Period , and then computes the total Notice Pay amount.Termination Workbench prorates the Notice Pay amount for the remaining days in the notice period based on the number of days in the month of leaving.

In addition to this, kindly go through the below links for better unserstanding.

Termination Workbench - Reporting - SAP Library

Termination Workbench Definition - Reporting - SAP Library

Regards,

Venkat Polisetty.

venkat_polisetty
Active Contributor
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Hi Sreekanth,

Hope, your query is solved, If yes close the thread and reward points.

If no let me know where your strucked.

Regards,

Venkat Polisetty.

venkat_polisetty
Active Contributor
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Hi,

Use the Termination transaction (PC00_M40_TERM) to determine the amount payable to an employee at the time of termination. This transaction determines the amount payable against:                                                                                                                                             

Notice Pay

There are two methods for computing the Notice Pay amount:

  1.  Compute the prorated Notice Pay amount separately for every month remaining in the Notice Period and then compute the total Notice Pay amount.

  2.  Prorate the Notice Pay amount for the remaining days in the Notice Period, based on the number of days in the month of leaving.

For example, an employee resigns on 31st May. The Notice Period is three months, however, the employee decides to leave on 15th July. According to company policy only the Basic Salary is used for computing the Notice Pay.

Method 1 – Notice Pay = (Basic * Number of days of notice period not served in July / Number of days in July) + (Basic * Number of days of notice period not served in August / Number of days in August)

= (16,000 * 16/31)+ (16,000 * 1) = 24,258.06

Method 2 - Notice pay = Basic * (Number of days notice period not served) / (No. Of days in month of leaving)

=  16000 * 47/31 = 24258.06

You configure the method to be used in the IMG under Payroll India ®Termination Workbench ®Calculation Method for Notice Pay.

Termination Workbench computes Notice Pay for the employee and displays the computed amount in the Termination Payment Details screen only when you select the Reason as Resignation in the Initial Entry screen.


venkat_polisetty
Active Contributor
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Hi,

In addition to that, please check SAP Note 374197 - FAQ: Termination Workbench.

  1. 2. Notice Pay
  2. a. Constant NPCMT needs to be maintained in V_T511K, to determine

the method for Calculation of Notice Pay

  1. b. Model Wage Type MN00

Setting for Indirect Evaluation - A in V_T511

Setting for RAP Indicator - Notice Pay in V_T7INA9

Setting for default amount - V_T539J


Regards,

Venkat Polisetty