Understanding /551 in SAP HR: Retroactive Payroll Calculations

In SAP’s Human Resources (HR) module, the wage type /551 is crucial in managing retroactive payroll calculations. Retroactive changes refer to employee compensation adjustments or deductions that affect previous payroll periods. This might happen due to reasons like:

• Changes in salary rates
• Corrections of errors in past payroll runs
• Backdated benefits or deductions

What is /551?

The wage type /551, known as the “Recalculation Difference,” is a system-generated value that stores the difference between the original net pay of a previous payroll period (/560) and the newly calculated net pay resulting from a retroactive adjustment.

How /551 Works

1. Retroactive Change: When a retroactive change triggers a payroll recalculation for a past period, the SAP system compares the original payroll results with the newly calculated results.
2. Difference Calculation: If a difference exists, the system creates the /551 wage type to store this difference. The sign of /551 is essential:
   • Positive /551: Indicates an increase in earnings retroactively (employee owes money to the company)
   • Negative /551: Indicates a decrease in earnings retroactively (company owes money to the employee)
3. Subsequent Adjustment: The amount stored in /551 is typically transferred from the current payroll period to the original as a subsequent adjustment using the wage type /552. This ensures that the retroactive difference is reflected in the correct accounting and historical accuracy of the payroll period.

Example:

Let’s say an employee’s hourly rate was incorrectly entered in January. This error is corrected in February, requiring a retroactive adjustment for January’s pay:

• Original Net Pay in January ( /560): $2000
• Correct Net Pay in January after Retro: $2200
• Difference ( /551): -$200 (The negative sign indicates the company owes the employee)

In this scenario, the $200 difference will be added to the employee’s February payroll as a /552 wage type, ensuring the employee receives the correct retroactive pay.

Key Points to Remember

• /551 is a system-generated wage type, not manually entered.
• /551 is specifically for retroactive payroll adjustments.
• The sign of /551 helps determine who owes whom.
• /551 is often used in conjunction with /552 for subsequent period adjustments

Additional Considerations

Understanding the technical configuration rules (known as the “schema”) that govern the generation and behavior of /551 is essential for HR and payroll specialists. Proper configuration ensures accurate and compliant payroll processing in the SAP system.