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Changing Payroll areas with retro effect

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Hi friends,

We have a situation to change the payroll areas of few employees who got promotion back-dated (more than a year later, the promotion list was announced). This is because, their grade got a new sub-group,which is belonging to a new payroll area. To add the complexity, their promotion start

date is falling in a middle of a payroll period. There are more than 10 wage components have to be reverted back and new wage components have to be paid to these promoted employees. Even, the income tax/ptax was also to be revised and paid as per the revised pay.

Please guide me in this, if anybody got the same kind of scenario.

Thanks in advance.

regards,


ram

Accepted Solutions (1)

Accepted Solutions (1)

venkat_polisetty
Active Contributor
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Hi Ram,

As per my knowledge, in this situation you have to change your payroll Area with back dated based on your Employees promotion date and change wage components accordingly but when you generate Payroll for those respective Employees system goes for a cross financial year retro, it checks whether the gross salary was increased or decreased, because based on this it comes up with a concept of Section 89 Relief.

If in your system, it is going for a cross financial year retro please go to table S89 in Function INTAX and you can find all cross financial year retro wage type like for Gross Slary (/616), For PTax (/622), PF (/6I2).

Regards,

Venkat Polisetty.

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Hi,

Venkat is absolutely correct.

But I would like to share what we have done for a similar situation:

1) Payroll area need not be changed back-dated. As per my knowledge, payroll area is only a grouping of set of employees for whom, the payroll has to be run together. But if you have used OUTWPABART in any of your PCR and done some specific calculations/wage types, then you may have to check what kind of process is being done there.

2) In our case, employee will move to different ESG because of any promotion. We have to pay using any specific wage types for this new ESG by making new entries to these new wage types (or infotypes which contain/generate those wage types) which is back-dated.

3) We have to revert back the specific wage types which are belonging to the old ESG from the date of promotion (which is opposite of step-2 given above).

4) As per Mr.Venkat, system may go for a cross financial year retro. Then we have to follow his advise.

5) In my previous company few employees got a back-dated promotion. But there is a peculiarity in that. Previous ESG was paid with huge over-time wages, which have to be reverted and paid less, because, new promoted grade is not paid with the overtime wages but they were compensated with some fixed allowances. But their new grade got higher basic pay. This was a one time problem (particularly when employees were climbing from Non-managerial grade to managerial grade).

What we did was, we ran wagetype reporter and downloaded all their wage types/payments into excel sheet and did some analysis. Based on that, we created a specific action type called 'pay-hike'. This action will indicate that they had been given some back-dated promotion. We also recovered their old wage types and paid with new wage types. We used to increase the basic, DA etc which will increase other pay components accordingly (which depend on basic pay).

It all depends on how complex your schema/pcr are written and how the wage types are assigned to various ESG.

Regards,

Bala.

Answers (2)

Answers (2)

venkateshorusu
Active Contributor
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As far i know, Once we execute the live payroll run hence forth we can not change payroll area, try whether you are able to change payroll area or not.

Regards

Venkatesh

venkateshorusu
Active Contributor
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As far i know, Once we execute the live payroll run hence forth we can not change payroll area, try whether you are able to change payroll area or not.

Regards

Venkatesh

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Hi friends,

thanks for the replies.

regards,

ram.