Factoring In SAP HR


Factoring In SAP HR

Factoring in SAP HR: A Comprehensive Guide

In payroll, factoring is a crucial technique for adjusting payments accurately based on an employee’s work schedule, absences, or other variables that affect their working duration within a pay period. SAP HR offers a robust factoring mechanism to ensure employees are compensated fairly and in accordance with company policies. Let’s delve into the nitty-gritty of factoring in SAP HR.

Why Factoring Matters

  • An employee joins or leaves mid-period: When an employee starts or leaves a company outside of the standard payroll cycle, factoring ensures they receive payment only for the duration they were actively employed.
  • Unpaid absences: If an employee takes unpaid leave, factoring allows you to deduct the corresponding amount from their salary.
  • Changes in Pay: When an employee’s base pay changes within a pay period, factoring accurately calculates their earnings based on the different pay rates.
  • Organizational shifts: Factoring plays a role if an employee moves to a different cost center or department with a different pay structure.

How Factoring Works in SAP HR

  1. Partial Period Parameters: Processing classes within the payroll schema determine how a wage type is treated during factoring. SAP delivers standard settings, which you can customize for your organization’s needs.
  2. Factoring Infotypes: These info types are vital for storing factoring-relevant data:
    • Infotype 0014 (Recurring Payments/Deductions)
    • Infotype 0015 (Additional Payments/Deductions)
  1. Schema Configuration: The payroll schema is the heart of factoring in SAP HR. Key subschemas involved include:
    • X000 (Main payroll schema)
    • XAL9 (Subschema for factoring)

Factoring Methods

SAP HR commonly uses factoring methods like:

  • Daily Factoring: Calculates Pay based on calendar days an employee was active.
  • Hourly Factoring: Pay is precisely calculated based on actual hours worked.
  • Fixed Factors: Applies predetermined factors for specific scenarios.

Setting Up Factoring in SAP HR

  1. Wage Type Configuration: Within table V_512W_D, assign processing classes to wage types, indicating how they should be treated during factoring.
  2. Factoring Infotypes: Utilize info types 0014 and 0015 to store relevant data, such as absence information, for factoring.
  3. Schema Customization: You can adjust the payroll schema by configuring subschema XAL9 with the factoring rules and methods that suit your requirements.

Example: Factoring for Unpaid Leave

Let’s say an employee earning $3000/month takes five days of unpaid leave in a month with 30 calendar days.

  • Daily Factoring:
    • Daily Rate: $3000 / 30 = $100
    • Days Paid: 30 – 5 = 25
    • Factored Pay: $100 * 25 = $2500

Important Note: Factoring configurations can be intricate. It’s advisable to work with an SAP HR consultant to guarantee your setups comply with local regulations and your specific enterprise policies.

You can find more information about  SAP  HR in this  SAP HR Link



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