SAP US Payroll

Class 1(31/03/2025)
Intro to payroll
• In general To learn US payroll, we discuss in two ways
• 1. SAP HCM
• 2. SAP SF ECP
• Both work with same engine and even the processing class, PCR,
navigation paths are same but the licenses are different
• For Payroll in SAP HCM the pre requisite is PA, OM and Time
• But for Payroll in SAP SF the pre requisite is SAP SF ECC
Things we should know in Payroll
• In IMG what are we going to configure
• In basic settings (all together these details are coming to IT0001)– we
are going to configure the below
• pay period parameter
• Payroll area
• Generate payroll periods
• Generate calendar cumulation
• Control record
• Defaulting payroll area
• When you run payroll it is read by what function/sub schema
• We must know about PCR, Schema, rules, sub schemas
• Go to pe01> schema >u000>Change> here you get to see the schema
called UBD0 . Here there is a function called ENAME
The process to run thepayroll
• Pe04>enter > ENAME>display>(here we will understand ename is
used by which countries)
• What ever the countries are been checked are the countries using
ENAME function
• Pe04> enter p0002>display> here we get to see that this is only for
Canada and Belgium not for all countries like ENAME
• And to know what are the infotypes using this date we can click on
infotypes on the top in the display screen
Basic pay configuration
• It has approximately 18 steps
• What ever we configure in basic pay all those details ll be in IT0008
• Recurring pay deductions – 0014
• Additional payments – 0015
• Additional pay off cycle – 0267
• Employee remuneration information – 2010
• All these infotypes remains same for all countries
Difference in payroll(US, Canada,
etc…)
• Only Model wage types will be different for each country
• To know what are the wage types associated to the country
• Go to OH11> entry country code> original F4> you get to see all the
possible wage types for all the countries
• So to find for US, > click on the small triangle on the top and enter
country grouping details (10 for us), > wage type – enter m* and click
enter> you get all the wage types related to US
• Absence(2001) valuation and Time wage type(2010) are integrated
with the Time
• Quotas(2006)
• But we should know the sub schema that is integrating here,
So for US- ut00, UK – gt00, India – xt00, Canada- kt00, singapoor- rt00
• If you don’t know you can use Xt00 which is international
• Reduction formulas– (calendar days/working days/ working hours)
• Cumulation wage types
• Cumulation

• Processing class
• Cumulative class
• Evaluation class
• For US payroll(things to know)
• Taxation(0207, 0208, 0209, 0210, 0234, 0235, 0161)> to see these
infotypes> pa30>open an employee>enter 0207 in infotype bar and
display> u can click on tax infotype option next to overview
• Benefits(schema- ube1)
• Benefits with payroll
• Garnishments
• As a consultant you should know what is processing class
• Tax types(residential area tax, work area tax, unemployement
insurance, medicare tax, social security tax)
• Tax rates> these are already configured by support or bsi team

• We must know the fiscal years for all the countries we run payroll for
• For PA, we need(know the configuration paths as well)
• Company
• Company code
• Personal area
• Personal sub area
• emp group
• Emp sub group
• Link all these as well
Class 2
• Basic settings –
Payroll area(0001)- used to run payroll
1. Period parameter> 2 didgit num code> PP is the frequency of
payment
• Img>payroll>payroll US>basic setting>payroll organization>define
period parameters> enter the period parameter number, and choose
the time unit(by F4),eneter start date(suggest to enter company start
date)>save
2.Define date modifier(same path as period parameters)
Two digit code, 00 is the standard modifier
Date modifier is nothing but the payment date, like if its monthly, last
date of the month or next month first(choosing the date)
• Img>payroll>payroll US>basic setting>payroll organization>define date
modifiers>new entries> enter date modifier number, name as last day
of the month or as per the requirement
3. Payroll Area two digit alphanumeric code> payroll area is a group of
employees to whom organization has to run payroll once in a specific
period and pay salary on a specific date
• Payroll area contains period parameters and date modifiers(0001)
• When we hire an employee we maintain 0, 1, 2, 6 but 3 is linked to
control record so it ll fetch all the details and we can edit if anything is
required.
• Img>payroll>payroll US>basic setting>payroll organization>Assign new
payroll accounting areas to period modifier> check payrol areas>new
entries> enter payroll area, payroll area text, choose pp, chose dm>save
4, check default payroll area(tcode- pe03)
• Defaulting payroll area in 0001 with ABKRS feature
• If the entire company is under one payroll area then you can define
with BURKS feature
• Loaction wise(Personal area) – WERKS feature
• Emp group wise – PERSG feature
• IMG>PM>PA>Org Data>Org Assignment>Create payroll area
5. Generate payroll periods
We can generate ppayroll periods as per our wish(1y, 2Y, or 10Y)
Pay day rules are standard, used to fix the payment date and rules are as follows:
• Adds the no of days to the period start date
• Deducts the no of days from the period end date
• Adds the no to the period end date
• Monthly only- the no of days is used as the payment day
• Img>payroll>payroll US>basic setting>payroll organization>generate payroll
periods>generate payroll periods>eter pp, DM, start date as company start date,final
year(as per the req, 2030),fiscal year will be populated automatically, pay day rule-
4(choose among the above four rules though f4),no of days-25, period number – 1(1-
start date, 2- end date), click on carry out table change> save
• For getting the fiscal year we have to go to o037>maintain your
country grouping. If you do this the fiscal year come by default like
for India it will come 401, etc
• One step back and check payroll periods
• In th eposition you can enter the year (like 2025, 2024) and see the
payroll periods for that year
• Again one step back and chek pay dates
• position> enter dm, Parameter, Payroll year, payroll period>here of
there are any dates which are coming on weekends we can manually
change the dates to the previous or post weekend date
6. Create control Record(tcode – pa03)
• Every payroll area has a control record
• Def: Control record controls the master data
• Control record contains 4 statuses and 4 modes
• Released for payroll
• Released for correction
• Exit
• Check payroll results
• Apart from these 4 there are 2 more things they are payroll period and
earliest retro accounting period
• Payroll period: give one period back for period we maintain master data
• Earliest retro accounting period: for how many months you can run
payroll for the past period
• Img>payroll>payroll US>basic setting>payroll organization>Assign new
payroll accounting areas to period modifier> create control
record>enter payroll area>create>enter payroll period(which is 1 month
back to what you want to perform), enter current month at earliest
retro acctbg period(current month because we cannt run for this
monthor else you can take company foundation date as well)>save.
• And we can also delete the control record but take a screenshot to
know the details of the pay period date details and perform again
• Without these settings we can not hire an employee
Basic Pay
IMG>pm>pa>pd>Basic pay>
Here we have 8, 14, 15 infotypes
In Us there are few companies have maintain only 8, few maintain 8 and 14
and few maintain 8, 14 and 15
We use only 8 if the company provide hourly wage earners
We use 8 and 14 if the company provide some allowances
We use 8, 14 and 15 if the company has salaried employees, who get
allowances and wage earners
This is completely based on the company requirements
Class 3
• 0, 1, 2, 3,6, 7 are the mandatory infotypes required to run the payroll
• And as discussed in the previous session among 8, 14, 15 atlest one should be
maintained
• And 207, 208, 209, 210, 234, 235 are also mandatory(194,195,216.171,167 also)
• If we configure infotype 8 then 14 and 15 will be easy
• What do we configure in infotype0008
• Wage types which are common and compulsory(components in wage type are basic pay,
pay period, city allowance)
• If they are wage earners then there is only pay periods or basic pay
• If they are hourly earner then only pay period
• For not just 8 but for 14, 15, 210, 267 the navigation path remains same as basic pay
18 steps to configure basic pay
1. Define EE sub group grouping for pcr and collective agreement provision
2. Check pay scale type
3. Check pay scale area
4. Check assignment of pay scale structure to enterprise structure
5. Determine default for pay scale data
6. Define hourly rates with several decimal places
7. Revise pay scale groups and levels
8. Create wage type catalog
9. Check wage type group ‘basic pay’
10. Check wage type text
11. Check entry permissibility per infotype
12. Employee sub groups for primary wage type
13. Personnel sub areas for primary wage type
14. Define wage type permissibility for each PS and ESG
15. Check wage type characteristics
16. Revise Default Wage types
17. Define valuation of base wage types
18. Define annual salary
1. Define EE sub group grouping for pcr(personnel calculation
rulewhich is a mathematical calculation) and collective agreement
provision:
• Img>Pm>PA>Payroll Data>basic pay> Define EE sub group grouping
for pcr and collective agreement provision>
• In this step we will specify whether the employees are 1. hourly wage
earners 2. Wage earners 3. Salaried(4, 9 will be customer specific)
• If you want to select all then just enter *(which means all types are
included)
• PCR is a personnel calculation rule or mathematical calculation
• Calendar days(k)>tksoll(function tksoll, 31days=30000)(wage type 3)
• Working days(a)>tasoll(tasoll. 22 days=30000)(wage type 2)
• Working hours(s)>tssoll(tssoll, 175 hours=30000)(wage type 1)
• Let go to schema to check one PCRpe01>u000>
• CAP(collective agreement Provision) thi sis nothing but the
agreement between the company and the employee with all the
compensation details
• Path: Img>Pm>PA>Payroll Data>basic pay> Define EE sub group
grouping for pcr and collective agreement provision>enter country
grouping as 10(US)> find your employee groups> enter ESG for PCR
and Esg for Cap as 3(or 1or 2 as per the requirement)>save
• PCRs are there in Time Management as well, if you manage in Payroll
they will replicate in Time. If you manage in Time they will replicate in
payroll
2. Check Payscale type
• In general we can create any no of payscales as per the business
requirements, it’s a two digit code, reflects in it0008
• Pay scle type is a type of contract like salaried, union contract and non
union contract
• Path: Img>Pm>PA>Payroll Data>basic pay> check pay scale type>new
entries>eneter pay scale type and text(vy, salaried uc(union
contract))>save
3. Check pay scale area
• Pay sale area is a location where specific grade of employees belong
to. And it’s a two digit code
• Personal area and pay scale area could be different or same as well
• Img>Pm>PA>Payroll Data>basic pay> check pay scale area>new
entries>enter your pay scale area and text > save
4. Check assignment of payscale
structure to enterprise structure
• In this we link personal area, personal sub area to pay scale type and
pay scale area
• We have few structures like
• Enterprise structure- company, company code, personal area and personal
sub area
• Personal structure- employee group, employee sub group and payroll
accounting area
• Pay scale structure- pay scale type, pay scale area, pay scale group and pay
scale level
• Wage type Structure- Primary wage type, secondary wage type, Time wage
type and customer specific
Path: Img>Pm>PA>Payroll Data>basic pay> check assignment of pay
scale structure to enterprise structure>find your personal area and
personal sub areas> enter your pay scale areas and pay scale
types>save

So far we have maintained ABKRS feature

5. Determine default for pay scale
data
• Defaulting Pay scale data in 0008 with TARIF feature
• We have done ABKRS which is defining payroll area in 0001(it isn’t
mandatory)
• Path: Img>Pm>PA>Payroll Data>basic pay> Determine default for pay
scale data>WERKS>create> create your personal areas>click on
personal area> create new> return value> eneter the valuewhich is
payscale area/pay scaletype that you have created>transfer>save
6.Define hourly rates with several
decimal places
• This is the connectivity between step 1, 6 and 7
• Here we are determining the wage currency which is usd and whether its
salaried, hourly or wage earners
• In step 1 we maintain 3(salaried)
• In step 6 we maintain 2(wage earners) and in step 7(hourly) we maintain 1
• Path : Img>Pm>PA>Payroll Data>basic pay> Define hourly rates with
several decimal places>check and change view assign pay scale-
currency>new entries> enter pay scale type, pay scale area,for grouping
you have specify the same grouping you have specified in step 1, start date
as company start date,end date,currency as USD because its for
payroll>save
7. Revise pay scale groups and
levels
• It is maintained in v_t510(basic pay table)
• Here we specify grade wise & level wise amount
• Grade is pay scale group and level/band is pay scale level
• City allowance is maintained in V_t539j and Car allowance is maintained in V_t510k table
• And for commission its different from employee to employee and it is not maintained in
any table, you have maintain manually
• Path: Img>Pm>PA>Payroll Data>basic pay> revise pay scale groups and levels>enter
country grouping, payscale type, pay scale area then enter>new entries>enter grouping -3,
ps group-manager, level-jnr,enter the start date and end date, do not enter the wage type,
enter the amount as 10000 then enter the next row with level- snr then enter amount as
12000, this way you can define the amounts fro different kevels and different groups>
save
Class 4
8. Create Wage type Catalog
Wage type structure: it has 4 elements
1.Primary wage type- it is also know as dialogueor standard oe model wage type, identifies with four digit
code starts with alphabet from a to x
• There are few model wage types under primary wage types =. They are listed below
• M001 – Hourly Wage
• M010 – salary
• M112 – Comission
• M114 – Uniform allowance
• M115 – Equipment all
• M116 – Car allowance
• M740 – Union dues
• M730 – 401k contribution
2. Secondary wage type
3. Customer specific
4. Time wage type
2. Secondary wage type
• These are also called as technical wage types, and are generated by the sysem
• All payroll reports are seen in secondary wage types and we do not cope secoundary wage types( we can but as per sap
standards we do not)
• These are identified with 4 digit code starts with “/”
• Important secondary wage types are as shown below:
• /001 – valuation base
• /002 – valuation base
• /101- Total gross
• /102 – 401(k) wages
• /110 – net payments/ deductions
• /301 – TG Withholding tax
• /303 – TG EE social security tax
• /304 – TG ER social security tax
• /305 – TG EE Medicare tax
• /306- TG ER medicare Tax
• /401 – Tx withholding Tax
• /559 – Payment bank transfer
• /560 – Amount to be paid
3. Customer specific
• These are 4 digit codes atrts with a number
• These are copied from model wage type
• in IT0008 we are creating basic pay and city allowance
• In it0014 we are creating car allowance and 401k contribution
• In it0015 we are creating commission
• From M010 im can copy 1vy1- basic pay(vy is the pay scale or what ever I
have created earlier it just an alphabet)
• M010 – 1vy2- city allowance
• M116 – 1vy3 – car allowance etc…
4. Time wage type
• This is a part of time evaluation
• This is created in v_t510s table
• A wage type which is created in time management and generated in time
evaluation is known as time wage type and it will be in the ZL table
• In payroll we have basic pay amount, but in time we have time wage type
contains number of hours as s(recorded working hours) and m(over time)
• So to integrate Payroll and time we use utoo schema where it has rab, pab
and zlit(zl table) functions
8. Create wage type catalog
• Same path and you are creating from model wage type
• We are copying wage types from it0008 which is basic pay which are
common and compulsory for employees
• So for basic pay we have navigation path and also from tcode oh11 or pu30
• pm>pa>payroll data>basic pay>wage types> create wage type catalog>(you
cn not create one so you can copy >in this screen original means from what
wage type you are copying which is m010, customer specific provide like
1vy1> enter all the texts will automatically pops if the customer wants
another text we can just rename it here and we can even eneter the text in
other languages as well but only text>copy> if the errors are 000 then only
its saved correctly
9. Check wage type group ‘basic
pay’
• pm>pa>payroll data>basic pay>wage types>check wage type group
basic pay> here we are just checking whether the wage types we
created related to basic pay(0008) are there or not
• If not you can just create new ones but new entries
10. Check wage type text
• Path : pm>pa>payroll data>basic pay>wage types> check wage type
catalog>check wage type text> see if needed any modifications to the
text > save
• V_512w_t table
• Here we can change the wage type text as per the business
requirement
11. Check entry permissibility per
infotype
• Path : pm>pa>payroll data>basic pay>wage types> check wage type
catalog>check infotype permissibility per infotype>enter wage
type>automatically start day would be 1/1/1900 you can also change
it to company start date
12. Employee sub groups for
primary wage type
• Grouping employee sub group with single digit code from 0 to 9 if
they have same wage type
• Path : pm>pa>payroll data>basic pay>wage types> check wage type
catalog>employee sub group grouping for primary wage type > enter
country group code enter> enter employee group and sub
group>enter 1 in ES grouping if they have the same basic pay or 2 if
they do not have same basic pay> save
13. Personnel sub area for primary
wage type
• Grouping personal sub area with single digit code from 0 to 9 if they
get same wage type
• Path : pm>pa>payroll data>basic pay>wage types> check wage type
catalog> employee sub area for primary wage type>position> enter
personal area>enter any single digit code from 0 to 9 in ps grouping
>save
14. Define wage type permissibility for each
PS(personnel subarea) and ESG(employee sub
group grouping)
• Here we are linking wage type to employee sub group
• Path : pm>pa>payroll data>basic pay>wage types> check wage type
catalog> define wage type permissibility for each PS and ESG>
position> enter wage type>slect all the wage types you are working
on >double click>here enter the details carefully by checking where to
enter 1>save
• This is maintained in table v_511_b
Class 5
15. Check wage type Characteristics:
• Table v_t511 is where this is maintained
• To maintain this table you have to maintain other 3 tables, they are
t510(gradewise amount), t539j(percentage based amount), v_t510k(fixed
amount same for all--- this comes in recurring payments)
• Path : pm>pa>payroll data>basic pay>wage types>check wage type
catalog>check wage type characteristics>enter wage type>double
click>click on add to total in amount, enter percentage/ hourly as per the
requirement in measurement and enter + and – in input combination, in
indirect evaluation module enter TARIF, module variant A, rounding type 0,
check rewritable >save
16. Revise default wage types
• Creating wage type model with 4 digit code that contains all the lsit of
wage types to default wage type in 0008 through LGMST feature
• Path : pm>pa>payroll data>basic pay>wage types>revise default wage
types>new entries>eneter 4 digit code and then enter sequences as 1,
2, 3, enter start dae and end date , enter wage types, then click on
enter, do not enter mode>u can choose either f or o>save
• Click on Feature>LGMST>change>take country cgrouping
10>company code> create>field of decision
making>Werks>create>choose pa>create return
value>40/vysm>activate>save
17. Define valuation of base wage
types
• V_t539j table
• Same path>new entries> mod summe valuated 1vy2, no 1, start date,
end date, choose the wage type, eneter the percentage>save
18. Define Annual Salary
• 4 steps
1.Ansal- maintain Ansal feature(Annual salary) its return value is asal
Path is ame> choose wage type annual salary>
2.Pay frequency> choose payment pay frequency
3. Wage type charecteristics- evertything is already maintained and now we are
cross checking
4.Relavent wage types for annual salary valuation-eneter same as already existed
lined but just change the wage types>save

With this step we have finished basic pay configuration, in general we go to pa40
and then hire an employee but for US pa/psa should be linked to tax company
which is us01(standard) then assign personal are to the tax company
Class 6