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Author's profile photo Danielle Larocca

4 Options for SAP Payroll Customers

What are the 4 options for existing SAP Payroll Customers?

SAP has approximately 9,000 active on-premise Payroll customers today. In 2012, it was announced that support for all on-premise SAP HCM would be guaranteed through calendar year end 2025. The goal of SAP SuccessFactors is to transform its on-premise SAP HCM and Payroll customers to cloud-based solutions, leveraging not only the SaaS platform but also the latest technology available. While the option for core HCM is obvious (Employee Central), the options for payroll can be a bit less clear. In this blog, I want to introduce the four main options available today for existing on-premise SAP Payroll customers.


1. Keep your payroll on-premise
This is a ‘do-nothing’ approach. Customers have invested a large amount of time, money and resources into their Payroll systems to get them to work just the way they want them to. These customers are concerned about the looming 2025 end of support date, but are unconvinced that there is an urgency to move as they believe adoption has been slow and that there may be a change to that published date. It is worth noting that this date has been extended twice already and even if it did not get extended again, there will be additional support models available for SAP on-premise payroll customers beyond year end 2025.  You can still leverage the Payroll Control Center in this approach to innovate your processes.

 2. Employee Central Payroll
SAP SuccessFactors does not yet offer a new payroll solution. Rather they leverage the world-class multinational SAP Payroll in a hosted “Cloud” environment by SAP SuccessFactors called Employee Central Payroll.

To move to this model customers are required to do five things:


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Why do I have to reimplement and simplify to move to Employee Central Payroll?
SAP has long been a system that is completely customizable, wherein each customer has designed the system (including its time and benefits functionality) to support their unique business processes and needs. SAP SuccessFactors, however, is based on a best practice methodology.

3. SAP SuccessFactors Managed Payroll
SAP SuccessFactors Managed Payroll is an offering, added in 2016, that addresses the needs of customers that have made a large investment in their SAP Payroll and do not wish to change it. This model allows customers to make no changes to their system or its processing. They simply allow a certified partner to host it on its server.

To move to this model, customers are required to do three things:

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4. Outsource your existing Payroll (via BPO or another vendor)
If the three options above do not meet your needs, you can consider outsourcing your existing SAP payroll. There are many choices available for outsourced payroll including Business Process Outsourcing (BPO) or working with another payroll vendor.   Vendors like Celergo even offer SAP-certified integration between payroll data/processes and SAP SuccessFactors Employee Central.

Table of four options for existing SAP Payroll Customers

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Please feel free to reach out to me if you have any questions around the SAP SuccessFactors Managed Payroll Offering.


This blog is cross-posted from

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      Author's profile photo J. Pazahanick
      J. Pazahanick


      Few thoughts and questions based on the below:

      - How viable #3 really is as an option as how many LIVE customers does EPI-USE Labs have for SAP Managed Payroll given it was launched almost 2 years ago. Here are my thoughts on that offering + conversations with 46 customers on it.

      Important also for SAP Payroll customers to be aware that SAP/SF have hinted around a Next Generation Payroll initiative with details to come in early Q1 so would highly recommend they "do nothing" until there is more clarity around the future direction to ensure they are aligned with SAP/SF.

      Author's profile photo Krishna Pinisetty
      Krishna Pinisetty

      Hello Jarret,

      Thank you for the article and sharing.

      Ref: Next Generation Payroll initiative with details to come in early Q1 2018.

      Any announcement from SAP in Q1 2018 on next generation payroll for the customers who want to implement Employee Central ?


      Author's profile photo J. Pazahanick
      J. Pazahanick

      Rumor has it an announcement on Payroll could be coming in 2018 but nothing is official.

      Author's profile photo Krishna Pinisetty
      Krishna Pinisetty

      Thank you Jarret.


      If a customer has HCM, Finance, SD, MM, WM in single instance ECC 6.0 No EHP and wanted to go for S4/HANA On-Premise with greenfield implementation with other modules. I'm considering 2 options for HR digital transmission:

      1) Remain On-Premise: Greenfield implementation of HCM in new ECC 6.0 EHP8.0 with HR Renewal 2.0 and ALE interfacing with S4/HANA On-Premise for Finance. Take the SAP proposed  product 'sidecar' to migrate HR for S4/HANA and stay on-premise until 2030 with SAP extended support/renewals.

      2) Deploy SuccessFactors Employee Central for core HR: Integrating with S4/HANA for Finance and Cost Center, Integration with new HCM ECC 6.0 EHP8.0 with HR Renewal to stay with their current Payroll, Time Evaluation and Benefits

      As I understand, In either case they need a greenfield implementation of HCM to new ECC instance with latest ehp 8.0 with HR Renewal 2.0 to keep continue with their current Payroll and Time Evaluation because a) S4/HANA doesn't support Payroll and Time Management process. b) SuccessFactors doesn't have full Payroll and Time Evolution processes.

      Is my understanding correct ? I  would appreciate your advice; is there is better option and sharing relevant articles of similar business cases.

      Thanks, Krishna

      Author's profile photo J. Pazahanick
      J. Pazahanick

      Not 100% as the "sidecar" wont be available until 2023 (if it is every even released) so option 1 is really do nothing as customer can stay in current environment (although would recommend getting current on EHP's and potentially look at HANA and Payroll Control Center.

      Author's profile photo Krishna Pinisetty
      Krishna Pinisetty

      Thank you Jarret,

      That is correct 'sidecar' won't be available until 2023. For option 1, I think we can a do HCM greenfield implementation in S4/HANA Release 1709,  along with finance and other modules and by upgrading to HR Renewal 2.0 we can get PCC, ESS and MSS.

      Is S4/HANA supports all of ECC HCM  functionalities of LoB HR like PA, OM, Time Management, Payroll, Benefits ?

      In this case SAP HCM is running inside of SAP S/4HANA on-premise then the integration is automatically given as part of so-called Compatibility Mode. I as understand SAP is ending main stream support for compatibility packs by end of 2025. With this 'sidecar' product in 2023 SAP proposing carve out SAP HCM to separate instance with S4/HANA HCM.

      I really appreciate your expert suggestion/advice.

      Thanks, Krishna