Have you ever needed to track an employee’s recurring deductions that were set up based on a specific balance or amount? For example, your company provides a loan to an employee that requires the employee to repay it over a specific period of time or your company offers employees the opportunity to contribute to a charity such as the United Way and the employee has specified an annual amount he/she would like to contribute. 

SAP provides an easy way to set up deduction wage types with a corresponding declining balance. These wage types utilize both Infotype 0014 (recurring deductions) and Infotype 0015 (additional payments). Infotype 14 contains the per pay-period deduction amount and validity period and Infotype 0015 contains the deduction limit or balance. The IT0014 and IT0015 wage types are linked together on Table T51P1 so that the IT0014 deductions will continue until the balance on IT0015 has been satisfied. During payroll processing a third wage type is generated in the Results Table (RT) that reflects the total amount of deductions taken to date. SAP provides several different wage type models on Table T51P1 that may be referenced and copied to your own company’s naming convention and specific scenario.

In the example below of the SAP model wage types on Table T51P1, the Indicator Field is used to specify the connection between both wage types. 

SM31 – V_T51P1

Step 1: Create Wage Types

I am going to set up a recurring deduction for a United Way contribution along with the annual contribution limit and Total Deductions. I used Table T51P1 as a reference and copied each of the SAP model wage types highlighted above using the WT Catalog copy option in the IMG (Payroll USA>Environment for Maintaining Wage Types>Create Wage Type Catalog>Copy). The Indicator number describes the wage type relationship link in the table.

There will need to be 3 new wage types created/copied:

1. WT M200 – IT0014 – WT Installment Deduction - Copied to WT 9906 – United Way Deduction

Wage Type 9906 will be entered on IT0014 Recurring Deductions and linked to Wage Type 9907 which is the balance entered on IT0015.

2. WT M202 - IT0015 – WT Initial Balance or limit - Copied to WT 9907 – United Way Contribution Amount

Wage Type 9907 will be entered on IT0015 Additional Payments and linked to Wage Type 9908 which is the total of deductions taken.

3. WT M203, Charitable Total, is copied to WT 9908 – United Way Total Deductions

Step 2: Set the Wage Type Relationships

Once the wage types have been copied, return to Table T51P1 and copy the relationship link for the declining balance scenario and enter new wage types accordingly.

In the example below,
Wage Type 9906 United Way Deduction is linked to WT 9907 United Way 

Contribution and
Wage Type 9907 United Way Contribution is linked to WT 9908 United Way Deduction Total

Once the total in WT 9908 matches the balance amount in WT 9907, the deductions (WT 9906) on IT0014 will cease.

Step 3: Enter Wage Types in Master Data, review Payroll Results

Let’s say we have an employee who elected to contribute $1000 to the United Way for the 2014 calendar year. He requested to have $100 per pay period deducted from his pay. We can set up the declining balance so the deductions cease once he reaches his $1000 limit.

On IT0014, enter the start date of the deduction, WT 9906 and the $100 deduction amount. Please note that you may need to add the new wage types to Table T512Z in order for them to be permissible on IT0014 and IT0015 respectively.

When you save IT0014, it will automatically bring up IT0015 and default WT 9907. Enter the Balance Amount and hit save.

Note: If an employee requests to change the annual contribution amount after his/her deductions have begun, you can use the change option on IT0015 and adjust the amount. SAP will recalculate the declining balance limit.

When payroll is processed, the Results Table (RT) table will reflect the following:

WT 9906 represents the pay period deduction taken
WT 9907 represents the remaining balance due
WT 9908 represents the total amount of deductions taken

Example of RT after several pay periods:

When the last IT0014 deduction is taken and the balance due is paid in full, the RT will look like the below example. WT 9907 is no longer present since the deduction balance has been paid in full. The first payroll period processed after the balance/loan has been paid off will remove all three wage types from the RT. If the final deduction due is less than the remaining balance, SAP will only deduct the amount of the remaining balance and not the full deduction amount set up on IT0014.

The CRT will contain the total amount taken out on IT0014 (WT 9906)

Additional Tips and Considerations:

  1. Update the Cumulation table T54C3 if you wish to track the deductions in various intervals (monthly, quarterly, etc). 
  2. Update Table T51P6 to determine how you would like the arrears to work for these deductions. What happens if the employee does not have enough funds to cover the deduction? Should the amount go into arrears or not?

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