Understanding the /566 Wage Type in SAP HR: When Pay Gets Complicated

In the world of SAP HR and payroll processing, numerous wage types handle the various components of employee compensation. One such wage type, the /566, is critical in specific payroll scenarios. Let’s delve deeper into what it is and why it matters.

What is the /566 Wage Type?

The /566 wage type in SAP HR is a technical wage type with the description “Carry-over from previous period.” Essentially, it’s a mechanism for transferring a portion of an employee’s earnings calculated in a previous payroll period to the current payroll period.

Why Does /566 Exist?

Here are some common scenarios where the /566 wage type comes into play:

• Partial-Month Payrolls: If an employee joins mid-monthly, their first paycheck might only reflect earnings for half the standard pay period. The /566 wage type ensures that the remaining portion of their pay is carried over to the next payroll cycle for full compensation.
• Retroactive Pay Adjustments: When an employee gets a retroactive salary increase or a bonus payment that applies to a prior payroll period, the /566 wage type facilitates the proper calculation and addition of that amount to their current pay.
• Specific Payroll Logic: Certain company policies or payroll rules could necessitate the carryover of earnings from one period to the next. The /566 wage type provides a technical solution for these requirements.

How Does /566 Work in Conjunction with Other Wage Types?

The /566 wage type is often closely linked to these wage types:

• /565 Carry-over for next month: This wage type indicates an amount calculated in the current payroll period but designated for payment in the following period.
• /562 Retro. diff. to prev. period: This wage type represents the difference in pay that needs to be retroactively added from a previous period.

Example

Let’s say an employee joins your company on the 15th of the month. When you run payroll for that month, their net pay is calculated based on half a month’s work. The remaining amount is designated with the /565 wage type (Carry-over for next month). When payroll is processed for the following month, the amount listed under /565 is automatically transferred into the /566 wage type (Carry-over from previous period) and added to the employee’s regular pay.

Key Points to Note

• The /566 wage type is technical and is usually not directly entered or maintained. The SAP payroll system generates it.
• Careful configuration and customization within SAP HR’s payroll schema are essential for correctly using the /566 wage type.
• Troubleshooting or analyzing payroll results involving the /566 wage type might require the assistance of a payroll functional consultant or an SAP HR expert.

Let’s Wrap Up

While the /566 wage type might seem like a small detail in the grand scheme of SAP HR and payroll, it plays a vital role in ensuring accurate employee compensation. Understanding its purpose and how it functions within payroll processes is important for organizations that utilize SAP HR.