Payroll Calculation based on 26 Days///

[Former Member]

Dear All,

We are implementing payroll for a customer who is into manufacturing & wants the payroll factor for all months to be 26 days flat. So 1 day basic salary is calculated as Basic Salary/26.

Requirement 1:

Payroll Factor = 26 days

Requirement 2:

Unpaid leave calculation:

Basic Salary = Basic Salary u2013 (Basic Salary/26)*No. of Unpaid Leaves

Requirement 3:

Employee is promoted/transferred on 21st march.

Basic Salary= $300 = BS1

Basic Salary after promotion= $400 = BS2

Actual working days from 1 to 20 is 17 (assuming 3 weekly off which are unpaid)

Actual working days from 21 to 31 is 10 (assuming 1 weekly off which is unpaid)

Salary for March calculated as follows:

Basic Salary = (BS1/26)17 + (BS2/26)10

Iu2019ve successfully mapped & fulfilled requirement 1 & 2 but requirement 3 I know can be mapped but is logically incorrect as in requirement 3 we are paying for 27 days whereas our payroll factor is 26 days. The deduction is based on 26 days but payments are based on actual working days. SAP best practice says to keep the factor same for payments & deductions. It is not just our company but many manufacturing companies who use the factoring base as 26 days.

Experts please advice how these scenarios can be mapped.

Regards,

VG

[Former Member · Accepted solution]

For which country payroll you are running kindly update and we can provide you the Inputs.If it is Indian payroll u need to go for custom PCR and even if go through custom PCR I doubt there are many mismatches while pro ration.

Best Regards,

[Former Member]

Hi,

If uor welversed with Pcrs then use in partial period parameter you nedd to use RTE=TKDIVP or RTE=TADIVP or RTE=TSDIVP insteed of TKSOLL, TKSDIVI etc...

Constant of 26 days reference table is V_T510H for payrol constants.

[Former Member]

I dont think this will work as mentioned by ERP1234, Do this and test mid month joining and terminations u will know the exact problems.

Best Regards,

[Former Member]

Hi,

use the logic of XPPF to avoid the issues.

[Former Member]

Dear RK,

I'm running International payroll. My client wants to pay the salary based on 26 days for all months but if there are changes in the basic salary inbetween the month like promotions/transfers/separations then it should be based on actual working days. So at one point itu2019s based on 26 days and on the other hand itu2019s based on actual working days.

Yes you are right ERP12345 solution will not work at any stage. I've customized the PCR XPPF & others things & itu2019s working fine as per my requirement but salary changes inbetween the months the calculations are going wrong.

If the month is of 31 days like march & the employee is promoted on 1st march then even if I keep my RTE=26 irrespective of the calendar days still the employee gets wrongly paid for other scenarios & payments based on actual working days concept goes for a toss.

I guess most of the manufacturing companies & banks use 26 days factoring base for salary calculations. Hasnu2019t any of the consultant have come across this problem?

Regards,

VG

[Former Member]

I never worked on international payroll and I think we can ask the solution from Mr.Sikinder and I think he handled this scenario for International Payroll

He might guide u the best Inputs for this Scenario

Best Regards.

[sikindar_a]

we have same scenario at intial stage we have changed RTE=26 days and also we have taken PRCL 10 as 2 in both the cases we have not able to get desired results in case of mid month hire and termination and also as per indian standrad PF and PT caluculations were wrongly deducted , So we have gone to XPPF where , it satisfies all the scenarios where we have Function

PPPAR

[Former Member]

Dear Sikindar,

Thnxs for your immediate reply. What you mean is you didn't implement it based on 26 days instead you went with sap best practice i.e. XPPF correct?

Regards,

VG

[sikindar_a]

Yes Varun ,

Since XXPF will not only work for Mid month and termination but , will work in case of Splits and LOP also.Check the same with that

in case of any thing please do let us know

[Former Member]

Dear Sikindar,

Thnxs I had already told my client not to use 26 days instead go ahead with sap best practice which Iu2019ve already implemented for them for their other entity

Itu2019s hard to convince the customer but Iu2019ll try. I knew this concept wonu2019t work the reason for me posting this thread was to understand how experts have handled this problem. Thnxs for your suggestions.

Regards,

VG

[sikindar_a]

I totally agree VG , good luck

[Former Member]

Thread Closed.

[Former Member]

Hi,

Could you please confirm whether your client want pay salary on payroll days or on calendar days ?

Thanks