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SAP HCM Payroll (PY)

For the End User

Overview of Payroll

Lesson Map

Payroll

NNPC Payroll Business Process


Lesson 1

Overview and Payroll Procedures


Lesson 2

Lesson One

Overview of Payroll

Lesson Objectives
By the end of this Lesson, you will be able to discuss theory around the following:

Lesson One - Two

Describe the NNPC Payroll Business Processes Describe the Payroll procedure Run a payroll for your employees and create a remuneration statement

Payroll Administration

Process Overview 1

Lesson One

Payroll Administration

Process Steps 1 to 3

Lesson One

Payroll Administration

Process Steps 4 to 5

Lesson One

Payroll Run

Process Overview 2

Lesson One

Payroll Run

Process Overview 3

Lesson One

Payroll Run

Process Overview 4

Lesson One

Payroll Run

Process Overview 5

Lesson One

Payroll Run

Process Steps 1 to 3

Lesson One

Payroll Run

Process Steps 4 to 6

Lesson One

Payroll Run

Process Steps 7 to 11

Lesson One

Payroll Run

Process Steps 12 to 15

Lesson One

Overview of Payroll

Lesson Map

Payroll

NNPC Payroll Process

Lesson 1

Overview and Payroll Procedures


Lesson 2

Lesson Two

Overview of Payroll

Payroll Accounting 1

Lesson Two

Overview of Payroll

Payroll Accounting 2
Broadly speaking, Payroll Accounting is the calculation of payment for work performed by each employee. More specifically, payroll accounting comprises a number of work processes, including the generation of payroll results and remuneration statements, bank transfers, and check payments.

Payroll Accounting also includes a number of subsequent activities, for example:

Lesson One

Transfer of payroll results to Accounting Various evaluations, such as evaluating the payroll account Transfer of payments to third parties, such as taxes

Overview of Payroll

Payroll Procedure 3

Lesson One

Overview of Payroll

Payroll Procedure 4
The calculation of payment comprises two main steps: 1. Calculation of remuneration elements 2. Statutory and voluntary deductions (country-specific) Both the remuneration elements and the statutory and voluntary deductions consist of individual payments and deductions that are calculated for an employee during a payroll period. These payments and deductions are included in the payment calculation by means of different wage types. The employee is usually paid by bank transfer or check and the payment amount is printed in a form for the employee.

Lesson Two

Overview of Payroll

Payroll Procedure 5

Lesson Two

Overview of Payroll

Payroll Procedure 6
The remuneration elements for an employee are formed from individual wage and salary types that are used during a payroll period. Payments such as basic pay, various bonuses, and gratuities are included in the remuneration calculation. Deductions can be made for items such as a company-owned apartment, company-sponsored day care, or similar benefits. Different factors determine whether such benefits increase or reduce the taxable income.

Lesson Two

This is determined by country-specific regulations and, in some countries, the philosophy of the company. An employee's remuneration consists of all wage types calculated for him or her during a payroll period.

Overview of Payroll

Payroll Procedure 7

Lesson Two

Overview of Payroll

Payroll Procedure 8
Voluntary and statutory deductions, such as tax and social security contributions, are taken from the gross calculation to determine the payment amount. Different gross values, such as total gross amount and gross tax amount, are used to calculate the deductions. For this reason, different totals are formed during the payroll run, and these totals are used for subsequent processing.

Lesson Two

Overview of Payroll

Payroll Procedure 9

Lesson Two

Overview of Payroll

Payroll Procedure 10
Payroll Areas are used to group employees for whom a payroll process is started at the same time. A payroll area also determines the exact date of the payroll run. If a company wants to start payroll processing or to pay some of its employees monthly, others weekly, at least two payroll areas are needed - one for monthly payment and one for weekly payment. The payroll area is used as a selection criterion for many steps in payroll processing, e.g. for the payroll run, salary statements and reporting. Additional selection criteria can be used to further reduce the number of employees for one payroll run, e.g. cost centre, employee group (these selection criteria should be used mainly for simulation as the payroll control record is ignored).

Lesson Two

Overview of Payroll

Payroll Procedure 11
If you want to start payroll from the menu, first specify the country, then call up the control record for the relevant payroll area. Here you carry out the required steps in preparation for the payroll run.

Lesson Two

Overview of Payroll

Payroll Procedure 12

Lesson Two

Overview of Payroll

Payroll Procedure 13
During the payroll run, master data and time data changes that affect the payroll past and payroll present are not permitted. The payroll program reads the master data and time data infotypes, which means that changes affected during the payroll run could jeopardize the accuracy of the payroll results. It also means that you must not run the payroll during master data maintenance. This is controlled by the payroll control record.

Lesson Two

Overview of Payroll

Payroll Procedure 14
The relationship between the menu and payroll control record is as follows:

Function in Menu
Release Payroll Start payroll

Status of Payroll control record


Release for payroll The payroll program is started and the status of the payroll control record remains released for payroll. Check payroll result Release for correction

Lesson Two

Check result Corrections

Exit payroll

Exit payroll

Overview of Payroll

Payroll Procedure 15
Payroll accounting is usually performed separately for different employee groups. The payroll period is not always the same for all employees. For example, you run payroll for one group at the end of the month for the current month, while for another group, you run payroll on a weekday for the previous week.

Lesson Two

Pay for Period and Pay Date determine the Payroll Area. Employees included in a payroll run at the same time and for the same payroll period are grouped into one payroll area.

Overview of Payroll

Payroll Procedure 16
Payroll areas facilitate the following functions in Payroll Accounting: Personnel numbers that are to be included in the same payroll run are grouped together. The payroll period and pay dates are defined using specific dates in a payroll calendar.

Lesson Two

Personnel numbers are assigned to a payroll area in the Organisational Assignment infotype (0001). It is possible to have a default value for the payroll area entered in the corresponding field. This depends on the assignment of the employee to the personnel subarea and employee group/employee subgroup grouping.

Overview of Payroll

Payroll Procedure 17

Lesson Two

Overview of Payroll

Payroll Procedure 18
The personnel numbers to be included in the payroll run are selected by specifying a payroll area in the payroll driver selection screen. The payroll period is transferred directly from the payroll control record to the payroll program. In a live run, the system determines the payroll period. The last period to be included in a payroll run is stored in the payroll control record for each payroll area. The current payroll period is the last period to be included in a payroll run, plus one.

Lesson Two

Hint: Payroll driver should be started by Personnel Number or Payroll Area only. Even if using Personnel Number, include the appropriate Payroll Areas in the selection area.

Overview of Payroll

Payroll Procedure 19

Lesson Two

Overview of Payroll

Payroll Procedure 20
The payroll log has a table of contents in the form of a tree structure. You can access specific detailed information from the nodes in the tree structure. Detailed headers enable you to search successfully for errors and facilitate navigation within the log information. If required, you can show or hide individual tree structure nodes. Note: The log is temporary and is available only as long as you are viewing it. If you exit the log, you have to re-run the payroll to reproduce it. Results are stored in the system, but the processing steps are not.

Lesson Two

Overview of Payroll

Payroll Procedure 21

Lesson Two

Overview of Payroll

Payroll Procedure 22
During the payroll run, the system recognizes any errors in master data and time data. This could mean that data is missing or incorrect. Payroll can be run successfully for error-free personnel numbers. A correction indicator is assigned in the Payroll Status infotype (0003) to personnel numbers with errors. This infotype acts as a payroll administrator for the individual employee. The personnel numbers with errors are listed in the payroll log. You can also call up and print these personnel numbers using the control record.

Lesson Two

Overview of Payroll

Payroll Procedure 23
Once these errors have been corrected, you can repeat the payroll run. This time run payroll using the Search Help (Payroll correction run-code W). This ensures that only the personnel numbers that have a correction indicator assigned to them in the Payroll Status infotype (0003) are selected.

Lesson Two

Overview of Payroll

Payroll Procedure 24

Lesson Two

Overview of Payroll

Payroll Procedure 25
The SAP system enables you to create remuneration statements for your employees. The remuneration statement clearly lists all payments and deductions used in the payroll run for an employee. The remuneration statement is usually created after a payroll run and before the wage or salary is transferred to the bank. Alternatively, you could use an Employee Self Service for the remuneration statement.

Lesson Two

The Employee can review the remuneration statement on a regular basis to determine if there are any errors in the data. This is made easier through Employee Self-Services (ESS).

Overview of Payroll

Payroll Procedure 26

Lesson Two

Overview of Payroll

Payroll Procedure 27
When you have run payroll successfully, you need to carry out a number of subsequent activities. Depending on the country requirements, these are divided into the following areas.

Per payroll period, such as cost accounting, FI, and tax information.

Lesson Two

Annual, such as tax reporting. Other periods, such as quarterly reports. Period-independent, such as management requested statistics.

Overview of Payroll

Payroll Procedure 28
All subsequent activities take place when the payroll run, remuneration statement, and wage and salary transfer activities are complete. By keeping informed and keeping the organization informed of any changes, the employee is assured that the pay check delivered is as accurate as possible.

Lesson Two

Overview of Payroll

Roles and Responsibilities 1


Role Salary Administration Officer Personnel Information Officer Responsibility Request, print and analyse reports on any wage types and payroll information . Load/monitor the incoming interface (Pension fund, Cooperative Societies, Insurances etc. Creates/maintains specific earning/deductions/allowances on the system by choosing relevant wage types Request, print and analyse reports on any wage type and payroll information. File source . Ensure all relevant beneficiary /application forms are completed for employee Benefit. Capture the approved changes to the master data records received

Lesson Two

Overview of Payroll

Roles and Responsibilities 2


Role Deputy Manager Payroll and Advances Responsibility The Accountant payroll receives all the variances in writing from the Salary Administration Officer and sends it to the Deputy Manager Payroll and Advances Payroll must inform compensation section(Payroll) with regard to any General Ledger / Vender account changes or additions.

Accountant

Lesson Two

Overview of Payroll

Policies & Procedures


Refer to NNPC Corporate Policy and Procedures Guide (CPPG)

Lesson Two

Overview of Payroll

Terminology 1
Terminology Description

Payroll Area

A payroll area represents an Organisational Unit used for running payments. All employees who have payroll run at the same time are assigned to the same payroll area. Date on which your Salary is paid into your bank account

Pay Date

Lesson Two

Overview of Payroll

Terminology 2

Terminology Payroll Status

Description Release Payroll Start Payroll Release corrections Exit Payroll All payments activities that need to happen after payroll has run example: Payments, to 3rd parties: Pension, Medical and Garnishee Order

Subsequent Activities

Lesson Two

Overview of Payroll

Supporting Documentation

Legislation - Nigerian National Petroleum corporation Decree 1977 - Nigerian Personal Income Tax Act, 1993

Lesson Two

Overview of Payroll

Summary of Lesson
You have now completed this Lesson and would have learnt the following theory:

Lesson One - Two

Describe the NNPC Payroll Business Processes Describe the Payroll procedure Run a payroll for your employees and create a remuneration statement

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