Understanding Wage Types in SAP HR

In SAP HR (Human Resources), wage types are the fundamental building blocks of your payroll system. These unique codes represent the different components of an employee’s compensation package, such as:

• Basic Salary
• Allowances (e.g., Housing, Travel, etc.)
• Deductions (e.g., Taxes, Insurance, Loans)
• Bonuses
• Overtime Pay

A well-structured wage-type system ensures streamlined payroll processing, accurate calculations, and seamless reporting within your SAP HR environment.

Step-by-Step Guide to Creating a Wage Type

Follow this guide to create a new wage type in the SAP HR system:

1. Access the Configuration:

• • Transaction Code: Use the transaction code OH11 to open the configuration screen for wage types.
  • SPRO Navigation: Alternatively, you can navigate to the configuration through the SAP SPRO transaction: SPRO -> IMG -> Payroll -> (Your Country Grouping) -> Basic Settings -> Environment for Maintaining Wage Types -> Create Wage Type Catalog

1. Copy an Existing Wage Type:

• • It’s highly recommended that you copy a similar existing wage type rather than create one from scratch. This ensures that you inherit the necessary configurations and streamlines the process.
  • Select the appropriate existing wage type and click the “Copy” button.

1. Assign New Wage Type Details:

• • Wage Type Code: Provide a unique four-digit numerical code for your new wage type.
  • Name: Give it a descriptive name that identifies its purpose.
  • Technical Characteristics: Carefully configure the wage type’s technical characteristics. These settings determine its behavior in the payroll calculation process.

1. Configure Specifications:

• Processing Classes: Define how the wage type is processed and evaluated (e.g., cumulation rules, whether it’s taxable).
• Evaluation Classes: Indicate how the wage type should be factored into different calculations.
• Account Assignment: Link the wage type to relevant G/L accounts for seamless integration into the accounting system.

1. Linking with Infotypes:

• • Use transaction code SM30 to access the View “V_T512Z.”
  • Determine the Infotypes where this wage type will be used (Infotype 0008 – Basic Pay, 0014 – Recurring Payments, 0015 – Additional Payments).
  • Add the new wage type to the appropriate Infotype.

Testing and Verification:

Before deploying your new wage type in a production environment:

• Thorough Testing: Run comprehensive test cases to validate the wage type’s calculations and interactions with other payroll components.
• User Acceptance: Involve relevant stakeholders in testing to ensure the configuration meets their requirements.

Important Considerations

• Country-Specific Regulations: Adhere to your country’s specific legal and regulatory requirements when designing wage types.
• Best Practices: Familiarize yourself with SAP’s best practices for wage-type creation.
• Documentation: Keep detailed documentation of your new wage type to streamline maintenance and updates.