Definition

Broadly speaking, payroll is used to calculate remuneration for work

performed by individual employees. More specifically, payroll is an umbrella term for a variety of work processes, such as the creation of payroll results and remuneration statements, bank transfers, and payments by cheque. The phrase also covers a number of subsequent activities such as the posting of results to Accounting and other evaluations, for example, for taxes.

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Impact of Compensation Strategies Compensation strategies can affect many facts of the business. Such as;

Improved employee morale and retention

Increased employee engagement and productivity

Strengthened governance and compliance with company vision and mission

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Overview of the Payroll Process

! Remuneration is calculated in two main steps: Calculation of wage elements Statutory and voluntary deductions (which are country-specific) ! Wage elements, statutory deductions, and voluntary deductions are all based on the individual payments and deductions that are calculated for an employee during a payroll period. The payments and deductions are stored as wage types and then included in the payroll calculation.

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Calculation of Wage Elements

! An employee's wage elements are determined on the basis of the individual wage types used in a payroll period. Payments that may be included in the calculation of remunerations elements. ! Employee remuneration is based on all of the wage types that are determined for a payroll period. ! The wage types can be entered online or generated during the payroll run using rule tables.

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Statutory and Voluntary Deductions

To determine the payment amount, statutory and voluntary deductions, such as taxes and social insurance contributions, are effected. The deductions are calculated on the basis of gross values, such as the total gross amount and the gross tax amount. For this reason, various amounts are calculated during the payroll run, which are then used for subsequent processing

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Storing HR Master Data Using Exact Dates

! The R/3 System assigns a start date and an end date to HR master data, as well as a large number of Customizing table entries. The payroll program requires these dates so that it can perform calculations for specific days, and retroactive accounting for previous periods. ! The system automatically recognizes changes to payment info types and triggers retroactive accounting, for example, after a salary change. ! Because of automatic retroactive accounting recognition, the R/3 System does not allow you to change the payroll results yourself.

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Payroll Control Record: Status

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Payroll Control Record: Periods

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Payroll Status Info type (System)

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Overview of Payroll Process

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Payroll Simulation

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Release Payroll / Released for Payroll

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Start Payroll (Part 1)

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Start Payroll (Part 2)

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Payroll Log

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Corrections / Release for Correction

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Check Result / Check Payroll Results

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Exit Payroll / Exit Payroll

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