Yearly Bonus exemption for Garnishments

Business Scenario:

           

In some company’s yearly bonus are given to the employees in 1st of January. And the business wishes this yearly bonus should not be considered as for garnishments.

To achieve these steps we have to do the following configuration.

  • Configure a Wage type for Additional Payments.
  • Identify the PCR that calculates the /G01 for garnishments.
  • Modify the PCR that has to get the amount /G01 after the deduction of Yearly Bonus.
  • Run the Payroll and check the Log of RT table

Configure a Wage type for Additional Payments.

Personnel Management==>Personnel Administration==>Payroll Dataè Additional Payments==>Define reason for change.

Here you have to define the subtype for the infotype Additional Payments 0015

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Personnel Managementè ==>Personnel Administration==>Payroll Data==> Additional Payments==>Wage Types==>Create wage type catalogue.

Select Copy Wage type in the popup Box.

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Here I have copied the wage type 1700 from the Standard Model wage type M101.

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The Wage type is copied to all the above mentioned tables

Personnel Management==> Personnel Administration==> Payroll Dataè Additional Payments==> Wage Types==> Create wage type catalogue==> Check Wage Type Catalogue==> Check Entry Permissibility for Additional Payments.

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Here we define weather the wage type is permitted multiple times in the period mentioned from the start date and end date.

In our case we are dealing with the Yearly bonus the wage type will be repeated every year so we have selected the option several time.

Personnel Management==> Personnel Administrationè Payroll Data==> Additional Payments==> Wage Types==> Create wage typ==> catalogue==> Check Wage Type Catalogue==> Define Wage Type Permissibility for each PS and ESG.

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Here our Additional wage type is permitted to all the employee groups so we need to check all.

Personnel Management==> Personnel Administrationè Payroll Data==> Additional Paymentsè Wage Types==> Create wage type catalogue==> Check Wage Type Catalogue==> Check wage type characteristics.

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Maintain the infotype 0015 with 500 USD in PA30 (Master Data)

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Identify the PCR that calculates the /G01 for garnishments.

Once we run the Payroll in the simulation mode and check each step by step for the garnishments we can identify where the garnishments calculation is happening.

Identifying the PCR that calculates the /G01 (Gross for Garnishments) Wage type. UGGR is the PCR that generated the /G01 Wage type.

Let’s look at the standard PCR.

PE01==> UGGR

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This standard UGGR is taking the amount from the /101 i.e. is nothing but the gross of the employee.

And then adding the gross value to the /G01 Wage type so that that will be the same value as the /101.

Let’s see what is /101 from the RT table and compare with the UGGR values

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Modifying The PCR (UGGR)

To modify the PCR we need to Copy the standard PCR UGGR to TGGR.

Pe01==> TGGR

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Explanation of the logic Written.

AMT=     /101:            At the initial level when the amount is equal to the /101

Note: The value here in the /101 is the combined value of the 1700

AMT-     1700:            We are subtracting the value of the wage type from the /101

ADDWTI/G01: Here we are adding the value after subtraction to the /G Input table

/101(10500)-1700(500) = /G01 (10000)

Insert the PCR in the Schema you are using.

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Run the Payroll and check the Log of RT table

Before running the payroll check the old payroll result without modification.

Check Basic Pay 0008:

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Maintain PA30 Additional Payments:

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According to Basic Pay and Additional Payments the /101 will be 10500. And /G01 will be 10500 same as /101.

Garnishments have to be 10% on gross for garnishments .i.e. would be 10500*10/100=1050.

Garnishments Service charge: 1% on garnishments amount ie.1050*1/100=10.50

Let’s Check the Result in RT TABLE:

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The values higlitened in the yellow are added to the /101 Wage type and the value from /101 is passed to the /G01 and the garnishments are calculated wrongly. /G01 is same as the /101.This is why the garnishment amount is1060.50 instead of1010

According to the business scenario the Yearly bonus given in infotype 0015 should not be added to the /G01 so that the garnishments amount should be calculated on only 10000.

Now running payroll after adding our PCR in the SCHEMA T000 (US Schema Payroll).

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Here the wage type in yellow are added to the /101 in the Red Highlitened.and /G01 is exemption from adding the wage type1700.

Here the garnishments are being calculated on the /G01 the net payments are 1010 which is correct.

Thanks and Regards,

Srikanth Reddy Munugala

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1 Comment

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  1. Babu K

    Well explained. I’ve a similar requirement which I refer your document as a reference to update garnishment schema & PCR. Great work

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