Understanding Processing Class 20 in SAP HR

In the intricate world of SAP Human Resources (HR), Processing Classes play a pivotal role. They act as instructions, governing how the system handles various wage types during payroll calculations. In this blog, we’ll delve into the specifics of Processing Class 20, its purpose, and its influence on essential HR processes.

What is Processing Class 20?

Processing Class 20 bears the designation “Cumulation and storage at the end of the gross part.” Essentially, it dictates how wage types are accumulated (cumulated) and stored after the gross payroll calculation phase but before deductions are calculated. This class offers granular control over how wage-type results are summarized and retained for downstream processes.

Where is Processing Class 20 Used?

Processing Class 20 typically finds application in these areas of SAP HR Payroll:

• Calculation Rules: Within the payroll schema (the program that executes payroll), PCRs (Personnel Calculation Rules) are the building blocks of various calculations. Processing Class 20 often works with specific PCRs to control the cumulation behavior of wage types.
• Wage Type Configuration: When you set up a wage type in the SAP HR system, you’ll assign various characteristics. One of these characteristics is the Processing Class.

The Significance of Processing Class 20

Let’s illustrate scenarios where Processing Class 20 comes into play:

1. Taxable Gross Calculations: To determine taxable income, you may need to aggregate specific wage types that form the taxable gross. Processing Class 20 enables you to customize this cumulation process.
2. Employer Contributions: Calculations for employer-side contributions, like social security or pension, frequently rely on a calculated gross amount. Processing Class 20 can ensure the correct wage types are combined for these contribution calculations.
3. Reporting: Precise breakdowns of various gross earnings categories are often necessary for HR analytics and reporting. Processing Class 20 facilitates the categorization and storage needed for these purposes.

Technical Note

Often, Processing Class 20 works in tandem with the PCR (Personnel Calculation Rule) X023. This PCR performs the cumulation and stores the results within the Results Table (RT).

Key Points to Remember

• Processing Class 20 influences calculations taking place after gross calculations and before deductions and net calculations.
• It focuses primarily on the cumulation and storage of wage-type results.
• Processing Class 20’s flexibility empowers you to tailor payroll computations according to your specific business rules and requirements.

Wrap-up

If you are an SAP HR consultant or administrator, having a solid grasp of the various Processing Classes, including Processing Class 20, is vital. Understanding them is crucial to configuring payroll schemas that accurately reflect the intricate compensation structures within your organization.