Basically Indirect Valuation of wage types means calculation of amounts of wage types indirectly.

We had recently come across an issue as follows:

Band and grades were given as per below screen shot:

Screenshot from 2014-03-13 15:46:55.png

And requirements were as below:

Screenshot from 2014-03-13 15:47:38.png

We had done this complete configuration through Indirect Valuation.

For the purpose, bands were named as Employee Subgroups in SAP as below:

Screenshot from 2014-03-13 15:49:23.png

Grade was named as Payscale Groups in IT0008.

Customising step is:

SPRO > Personnel Management > Personnel Administration > Payroll Data > Basic Pay > Define EE Subgroup Grouping for PCR and Coll.Agrmt.Prov.

Screenshot from 2014-03-13 15:51:48.png

Check Pay Scale Type

Check Pay Scale Area

Check Assignment of Pay Scale Structure to Enterprise Structure

Determine default for pay scale data

These Steps can be customised as per requirements.

Revise Pay Scale Groups and Levels

For the purpose /TPA wage type was used for entering manual amount for monthly ctc.

1. Conveyance Allowance is fixed Rs. 800. So this can be added in the same table in amount field as shown:

Screenshot from 2014-03-13 15:54:33.png

2. Similary Amounts fixed are for:

LTA – Rs. 5,000.00 pm

Medical Rembursement – Rs. 1250 pm.

Gift Card – Rs. 416 pm

these three are for selected catagories only. So, according to catagories (Payscale group), values will be defaulted in the table V_T510.

The wage type characteristics for these wage type will be entered as INVAL A (Table – V_T511)

Screenshot from 2014-03-13 15:58:05.png

Now, next step is creating Allowance Grouping. Customising step is as below:

Payroll > Payroll India > Pay Scale Groupings > Define Pay Scale Groupings for Allowances

Screenshot from 2014-03-13 15:59:59.png

Assign Pay Scale Groupings for Allowances

Screenshot from 2014-03-13 16:00:32.png

Now in Reimbursements, Allowances and Perks

1. Assign Wage Type Model for Pay Scale Grouping for Allowances

Screenshot from 2014-03-13 16:02:04.png

Here, 20 depicts the number of wage types that will be allowed in IT0008. The same is defaulted in feature LGMST as below:

Screenshot from 2014-03-13 16:03:20.png

Screenshot from 2014-03-13 16:04:00.png

and so on.

2. Maintain Default Wage Types for Basic Pay – In this step we default all the wage types that needs to populate in IT0008 (Basic Pay Infotype), example can be as below:

Screenshot from 2014-03-13 16:05:23.png

3. Maintain Wage Type Characteristics –

This is table V_T511. Here we will determine how the wage type will be calculated based on the matrix provided. This depends on the calculation rules.

4. Maintain Valuation of Base Wage Types

Under this table we determine the percentage of the base wage type to calculate the other wage type. For example, in the matrix provided, Basic is 8.33% of basic pay. The same is maintained as below:

Screenshot from 2014-03-13 16:09:19.png

Also, it is given that for a particular allowance grouping, Basic pay is 25% of total ctc. So this has been achieved by adding a multiplying factor in feature 40ECS, as shown below:

Screenshot from 2014-03-13 16:11:22.png

And then in valuation table, the same is maintained as:

Screenshot from 2014-03-13 16:12:12.png

So, for this purpose in table V_T511 (WT Characteristics), the values for basic pay wage type will be as follows:

Screenshot from 2014-03-13 16:13:29.png

Which module variant to be used will depend on the calculation rule:

> In INVAL A the value of a wage type is fixed for an allowance grouping.

> In INVAL B, the value of a wage type is determined as  a % of other wage type. You can also have a fixed component which can be different for different allowance grouping.

> In INVAL C also the value of a wage type is determined as a % of other wage types, which can be restricted to a maximum value which can be different for different allowance grouping.

> In INVAL D, the value of a wage type can depend on basic salary. It has three variants which corresponds to INVAL A, B and C.

For maintaining Special Allowance, SUMME is used. The calculation for Special Allowance was sum of all wage types minus monthly ctc.

So for obtaining this purpose, in Special Allowance wage type, characterstics were maintained as below:

Screenshot from 2014-03-13 16:19:01.png

And in valuation base wage type table, the same was maintained as below:

Screenshot from 2014-03-13 16:19:58.png

This way, in PA30, in IT 0008, we only need to maintained the amount for /TPA (Monthly CTC), as according to Employee Subgroup and Payscale Group and according to allowance grouping, all other wage type amounts will populate automatically.

Thanks and Regards,


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  1. Narendra Reddy B

    HI Experts i have a Scenario can any one help me out

    An employee joins in mid of the month and i will specify some X no of days in a wage type for which only SALARY and ALLOWANCES to be calculated in proportionately. This is to be done ONLY FOR THE FIRST MONTH. For the rest of the months till his termination if Y no of days were given in a wage type Only BASIC, VDA and FDA should be calculated proportionately  and other allowances Like HRA, SPL All and all should be paid  100 Percent.

    How this can be done please help me as this is very urgent.

    1. Bhagyashree Naik Post author

      yes…you should copy the wage type /TPA, as this is the standard wage type. Standard Wage Types should not be used preferably.



  2. Manu Nair

    Dear Bhagyashree,

    First of all thanks a lot for sharing such a helpful document.

    I could generate wage types & amt  in IT0008 and everything went on fine till payroll calculation. Once payroll is run,  the  gross salary  (wage types /410-  /434  in RT) shows double the original amount. (60,000 is the monthly salary as per IT0008, but it is showing 1,20,000 in gross part of RT and in form 16 of payslip ). I believe this is because of the inclusion of /TPA in IT0008. Can you pls specify what additional changes/ checks to be done in this wage type w.r. to processing/ cumulation class so that this amount will not be cumulated in gross part.

    Thanks in advance


  3. Sriram Tamil

    Hi bhagya,

    Good work really, i like it as i am beginner of payroll.. where would i get the other documents of your’s? do you have any document where you can simply explain cumulation class, processing class and other things.?




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