Handling Deviating Pay Frequencies from Employee C...

alexsandrazan · ‎2017 Aug 03

If you want to handle Pay Components with annual amounts (and annual frequencies) in Employee Central, deviating from the payroll frequency in Employee Central Payroll, here are some ideas on how you can do so.

Before we start, be reminded that in Employee Central the default field AnnualizedSalary shows the annual amount for the Pay Component Group. Let’s take this as Scenario 1 - the one recommended and supported by SAP.

Scenarios 2 to 4 are some of the possible workarounds for keeping Pay Components with frequency as “annual” and equivalent amount in Employee Central, in some cases deviating from the payroll frequencies in Employee Central Payroll. This can serve customers who want to show annual amounts in Employee Central on Pay Component level, in addition to the default field AnnualizedSalary. They are described in here as examples on how the standard solution can be extended, with the use of custom fields. The implementation and detailed configuration must be done on a project basis, taking customer specific requirements into consideration, and is under responsibility of the customer and implementing partner.

See the 10 minutes video at SAP Technology Channel on this topic.

SCENARIO 1 - STANDARD FIELD “ANNUALIZEDSALARY”:

This is the standard approach and followed by most customers.

The Pay Components are handled with annual amounts in Compensation Planning, and converted from Compensation Planning to Employee Central. The Pay Components in EC have frequencies aligned to the payroll frequency for that pay group, and keep the amounts equivalent to those frequencies on Pay Component level.

AnnualizedSalary is a default field that sums up the Pay Component Groups. It is used to show the annual salary amount in Employee Central.

Compensation Planning has Pay Components with ANNUAL amounts.

EC has Pay Components in Monthly/Semi-monthly/Biweekly/Weekly frequencies and its equivalent amounts (in our example, the frequency is MONTHLY).

The frequency of Pay Components in Employee Central is the same as the payroll frequency (in our example, MONTHLY).

The conversion from ANNUAL to MONTHLY amounts happens from Compensation Planning to Employee Central.

Example of Scenario 1:

Pros & Cons of Scenario 1:

Pros

Standard approach;

Straight-forward replication;

No need to prorate amounts from Employee Central to Employee Central Payroll.

Cons

Annualized Salary in Employee Central in Pay Component Group level only, and not individually per each Pay Component.

How to configure Scenario 1:

Follow the standard configuration instructions as per the Compensation Planning and the Employee Central Master implementation guides, available at SAP Help Portal page.

Result in Employee Central:

SCENARIO 2 - ANNUAL AMOUNT AS CUSTOM FIELD, NON-EDITABLE IN EMPLOYEE CENTRAL:

This follows the standard approach, just adding a custom field in Pay Component, to show the annual amount also for each Pay Component.

The Pay Components are handled with annual amounts in Compensation Planning, and converted from Compensation Planning to Employee Central. The Pay Components in Employee Central have frequencies aligned to the payroll frequency for that pay group, and keep the amounts equivalent to those frequencies on Pay Component level. Additionally, each Pay Component shows the annual amount in a custom field (created as non-editable/view only), that is calculated via Business Rules.

Compensation Planning has Pay Components in ANNUAL amounts.

EC has Pay Components in Monthly/Semi-monthly/Biweekly/Weekly frequencies and its equivalent amounts (in our example, the frequency is MONTHLY).

In Employee Central, each Pay Component has also a custom field to display the ANNUAL amount.

The conversion from ANNUAL to MONTHLY amounts happens from Compensation Planning to Employee Central, as per the standard solution.

The conversion from the MONTHLY standard field to the ANNUAL custom field in Employee Central is done via Business Rules.

The custom field Annual Amount in Employee Central is set to non-editable/view only.

The field Period Amount is editable in Employee Central.

The frequency of Pay Components in Employee Central is the same as the payroll frequency (in our example, MONTHLY).

Example of Scenario 2:

Pros & Cons of Scenario 2:

Pros

Very close to the standard approach;

Straight-forward replication;

No need to prorate amounts from Employee Central to Employee Central Payroll;

Annualized Salary in Employee Central in Pay Component Group level and individually per each Pay Component;

Pay Component frequencies in Employee Central consistent with payroll frequencies in Employee Central Payroll;

Transparency on what is replicated to Employee Central Payroll.

Cons

Two points of conversion: from Compensation Planning to Employee Central (as standard), and again in Employee Central via Business Rules (to convert back to Annual Amount in the custom field) – but this second conversion is for display only and does not affect any process;

The field showing the Annual Amount in Employee Central is set as non-editable/view only; amounts are displayed as annual per Pay Component, but must be maintained in Employee Central as equivalent amounts per frequency (Monthly/Semi-monthly/Biweekly/Weekly).

How to configure Scenario 2:

In addition to the configuration steps as for Scenario 1 (following the standard configuration instructions as per the Compensation Planning and the Employee Central Master implementation guides, available at the SAP Help Portal page):

1. In payComponentRecurring create a custom field called Annual Amount as non-editable/view only, not mandatory.

2. In payComponentRecurring, rename the standard field Amount to Period Amount. This field must be set to editable and mandatory.

3. Create a Business Rule to calculate the field Annual Amount (according to each possible frequency):

4. Assign the Business Rule to payComponentRecurring, Event Type = onSave.

5. Result in Employee Central, in edit mode:

6. Result Employee Central, in view mode:

SCENARIO 3 - ANNUAL AMOUNT AS CUSTOM FIELD, EDITABLE IN EMPLOYEE CENTRAL:

In this approach, each Pay Component in Employee Central has two amounts: the annual amount (as mapped from Compensation Planning), and the payroll frequency equivalent, or period amount (MONTHLY in our example). A custom field is created for the ANNUAL amount, and the standard amount field is used for the MONTHLY amount; only the MONTHLY amount is replicated to Employee Central Payroll.

The difference to Scenario 2 is that here the ANNUAL amounts are mapped from Compensation Planning to the custom field Annual Amount, and then converted to the Period Amount, via Business Rules. The Annual Amount is editable in Employee Central, and the Period Amount is set to non-editable/view only.

Compensation Planning has Pay Components in ANNUAL amounts.

In Employee Central, the Pay Components have two amounts: the ANNUAL amount (received from Compensation Planning), and the Monthly/Semi-monthly/Biweekly/Weekly equivalent amount (in our example, the frequency is MONTHLY frequency), calculated via Business Rule (and replicated to Payroll).

The ANNUAL amounts from Compensation Planning are mapped to the custom field Annual Amount in Employee Central.

The conversion from ANNUAL to MONTHLY amounts happens in Employee Central, via Business Rules.

The custom field Annual Amount is editable in Employee Central.

The field Period Amount is set to non-editable/view only in Employee Central.

The frequency of Pay Components in Employee Central is the same as the payroll frequency (in our example, MONTHLY).

Both amounts are available in Employee Central, and only the payroll equivalent amount (MONTHLY in our example) is replicated to Payroll.

Example of Scenario 3:

Pros & Cons of Scenario 3:

Pros

Straight-forward replication;

No need to prorate amounts from Employee Central to Employee Central Payroll;

Annualized Salary in Employee Central in Pay Component Group level and individually per each Pay Component;

Annual Amount editable in Employee Central;

Pay Component frequencies in Employee Central consistent with payroll frequencies in Employee Central Payroll;

Transparency on what is replicated to Employee Central Payroll;

Point of failure is non-critical: if the Business Rule that calculates the Period Amount and sets the Frequency fails, the employee will not be replicated (since the Pay Component frequency will not match the payroll frequency);

Flexibility to do the conversion via Business Rules for any necessary frequency.

Cons

The field Period Amount in Employee Central is non-editable/view only; Pay Components must be maintained in Employee Central as per Annual Amount;

Frequency must be calculated and overwritten in Employee Central via Business Rule.

How to configure Scenario 3:

1. In payComponentRecurring, create a custom field called Annual Amount, as editable and mandatory.

2. In Employee Central, set the frequency of the Pay Components that will receive this mapping (e.g. Base Salary) as default to annual:

3. Map the Annual Amount from Compensation Planning to custom field Annual Amount in Employee Central (as per Compensation Planning implementation guide):

4. In payComponentRecurring, rename the standard field Amount to Period Amount; set it to non-editable and non-mandatory.

5. Create a Business Rule to calculate the Period Amount and overwrite the “default” annual frequency with the payroll frequency (based on some criteria, for example the Pay Group from compensation information) – (default currency could be set in this same Rule):

6. Assign the Business Rule to payComponentRecurring, Event Type = onSave.

7. Result in Employee Central, in edit mode:

8. Result in Employee Central, in view mode:

SCENARIO 4 – KEEP ONLY ANNUAL AMOUNT IN EMPLOYEE CENTRAL, PRORATED IN A BADI:

With this Scenario, the Pay Components are kept in Compensation Planning and in Employee Central with ANNUAL amounts only; all the prorating and conversion is done on Employee Central Payroll side.

This approach is the riskiest, least transparent, and would make sense only for a customer who absolutely wants to see in Employee Central only the Annual amounts for Pay Components, and has Employee Central for many countries and Employee Central Payroll for only a very reduced set of countries, and therefore will handle the conversion of frequencies in Employee Central Payroll.

This configuration is based on maintaining a special type of frequency in Employee Central that will hold two different values for frequency (annualizationFactor and payFrequency😞 one used in Employee Central, and the other matching the payroll frequency. The field payFrequency will be handled per standard solution, but must be activated.

The conversion of annual amount to the equivalent of the payroll frequency is done in a BAdI that is available in the employee replication framework.

Compensation Planning has Pay Components in ANNUAL amounts.

Employee Central has Pay Components with ANNUAL frequency and ANNUAL amounts (as received from Compensation Planning).

The object Frequency, in Employee Central, will have two indicators of frequency: one for Employee Central (=ANNUAL), and the other for Payroll (=Monthly/Semi-monthly/Biweekly/Weekly; in our example, let’s use frequency as MONTHLY).

The Pay Component will be replicated with its full annual amount and the payroll frequency, without automatic conversion.

The frequency of Pay Components in Employee Central is not the same as the payroll frequency.

The conversion from ANNUAL to payroll-frequency equivalent amount (MONTHLY in our example) happens in a BAdI.

Example of Scenario 4:

Pros & Cons of Scenario 4:

Pros

In case there are many countries already configured in Employee Central for which the customer absolutely wants to keep every Pay Component with annual amounts only, and only very few countries to be implemented in Employee Central Payroll, it can be done by handling the conversion completely in Employee Central Payroll and without reworking the configuration in Employee Central;

Flexibility to do the conversion in the BAdI for any frequency.

Cons

In Employee Central, the employee has no information on what is the amount to be paid in each payroll period;

No transparency on what is replicated to Payroll;

Point of failure is critical: already on Payroll run;

Any issue originated by wrong calculations implemented in the BAdI is not covered by SAP standard support;

Requires changing the Employee Central corporate data model.

How to configure Scenario 4:

1. Activate the payFrequency field in the Foundation Object Frequency, by adjusting the corporate-datamodel.xml, as below:

<hris-field id="payFrequency" visibility="both"> 

<label>Pay Frequency</label>  

</hris-field>

2. Configure the object Frequency with: Annualization Factor = Employee Central frequency (in our example, ANNUAL) and Pay Frequency = payroll frequency (in our example, MONTHLY):

3. Check the Employee Central Payroll implementation guide, section “8.9.4 Frequency”, for supported frequency codes and possible combinations.

4. Maintain one “hybrid” frequency type for each combination of frequencies that will exist from Employee Central to Employee Central Payroll; “annual_to_monthly”, “annual_to_semi-monthly”, “annual_to_bi-weekly” and so on.

5. For assigning the frequency to the Pay Components, there are two options (using here Base Salary as example of Pay Component):

Option 1:

a. Maintain in Employee Central variations of the Pay Components per frequencies; for example, Base Salary with frequency “annual_to_monthly”, Base Salary with frequency “annual_to_semi-monthly”, Base Salary with frequency “annual_to_bi-weekly” and so on;
b. Via Associations, make visible for a given country only the Pay Component with the frequency valid for that country (as described in the Employee Central Master implementation guide, chapter “5.9 Setting Up Country-Specific Picklists for Pay Components or Event Reasons”).

Option 2:

a. Maintain in Employee Central only one Pay Component for Base Salary;
b. Via Business Rule (onSave on the Pay Component), overwrite the field Frequency with the proper one, based on a given criteria (for example Pay Group);
c. As a variation of this scenario, you can have the frequency (for example annual_to_monthly) set manually when a Pay Component is being created for an employee.

6. The replication will transfer the annual amount to Payroll, with the payroll frequency (in our example, 120.000 MONTHLY).

7. In the Badi (BADI HRSFEC_B_CE_PROCESS_EMPLOYEE, enhancement spot HRSFEC_CE_MASTER_DATA_REPL - further details can be found in chapters 7.1.5.2.1.1 & 7.1.5.2.2 of Employee Central Payroll implementation guide), you must convert the amount to the equivalent for each frequency (i.e. you must do the prorating in the BAdI).

8. Result in Employee Central, in edit mode:

9. Result in Employee Central, in view mode:

See the 10 minutes video at SAP Technology Channel on this topic.

If you have any comments or questions please do reach out to me or leave a comment here.

Alexsandra Zanetti

SAP Cloud Payroll Product Management