Recording Overtime with Time Recording Profile in SAP Business ByDesign
Often, companies have the scenario wherein if their employees record time that exceeds some threshold (for example, 40 hours per week), the excess hours need to be counted as overtime, and the employee would be compensated for these overtime hours, either as additional vacation hours or as overtime pay.
This blog post explains how the Business ByDesign system can be configured such that the overtime is automatically determined by the system based on the time recording of the employee.
To address this, we need to understand and configure three entities in Business Configuration
- Time Account
- The Premium Pay
- Time Recording Profile
1. Time Account:
The set up of time accounts can be accessed via the Activity list in business configuration. One can search for the right activity using a search term like “Time Account*“. Click on Time Accounts link belonging to the appropriate country, and in the screen that opens up, select “Maintain Time Account Types”.
The time account would be the collector of the overtime recorded by the employee. In this example, we will consider the requirement that overtime is paid out on a monthly basis. As a result, this time account needs it’s recurrence period to be marked as “Monthly”.
Tip 1: Do remember to configure the details section – the Bookable start and Bookable end date set to the start of time account and end of time account appropriately. Ensure that the right validity dates are set on this record as well – this tends to be missed by users setting up time accounts.
Tip 2: If the company has the policy that overtime is to be accrued as a type of vacation, then the Category of the time account must be set to Quota. This will allow the posting type “deduction” on this time account, when configuring the time type that the employee would use to record a vacation.
2. Premium Pay
In business configuration, an administrator can set the premium pay type and premium pay rules. It can be accessed from the Activity List using a search term like “premium pay*”. Click on Premium Pay link belonging to the appropriate country, and in the screen that opens up, select “Maintain Premium Pay Type”.
For this example, a premium pay is set up with the purpose of determining the time account to which the hours associated with this premium pay are posted.
Tip 1: If the Category type of the time account is selected to be a “Quota Account”, then the Allocation of the premium pay must be “Bank All”. If the category type of the time account is “Statistical Account”, then the allocation of the premium pay must be Payout All.
In the details section, under the sub-tab “Assign Time Account Types”, you may add the overtime account to which the overtime hours are to be posted.
Tip 2: Sometimes, company or legal policy requires that a percentage adjustment of the overtime hours are needed – for example, one hour of overtime must result in 1.5 hours of time posting in the overtime time account – then you can modify the “Percentage” column of the premium pay, setting it to 150%. In such use cases, only Quota based time accounts can be used for posting the adjusted hours, as determined by the Posting factor.
3. Time Recording Profile
In business configuration, against the time types, an administrator can configure the time recording profile. This is accessed by searching for “time types*” in the Activity List. Click on Time Types link belonging to the appropriate country, and in the screen that opens up, select “Maintain Time Recording Profile”.
For this example, I will configure the time recording profile to for automatic determination of the overtime hours.
Under the Overtime Rules tab, in the Overtime Threshold sub-tab, I will set up the Periodic Threshold to be weekly. I can set the Threshold Value to be either a fixed value – like 40 hours – or derive the value from the time model assigned to the employee. The drop-down value “Planned Working Time” allows the system to calculate the total planned hours for the week for the employee based on the work schedule, and sets the threshold based on this calculation. The drop-down value may also be set to “Weekly Average Hours” – this is a number that can be entered by the administrator when they configure the Periodic Time Model, or can be entered in the time file of the employee when assigning the time model as the work schedule.
In the Premium Pay field, I set the premium pay that I have configured earlier, that takes care of the posting to the overtime account. This premium pay is assigned to the hours that are exceeding the threshold number of hours defined.
If absences of the employee need to be taken into account when determining the overtime, then these can be marked in the Credited Absences sub-tab.
Assignment of the Time Recording Profile to the Employee
The previous steps are performed in business configuration. Now the administrator has to assign the Time Recording Profile to the employee – this is done via the Time File.
The time administrator can open the time file of the employee from the Employees view of the Time Administration work center.
In the Time File, under the Time Profile tab, in the Basic Data sub-tab, I assign the newly configured Time Recording Profile as shown.
Note: Don’t forget to assign the overtime time accounts in the Time Account Rules sub-tab.
Reviewing the overtime recorded employees
The overtimes recorded by the employees can be reviewed using the Time Account Balances report – which is available in the Reports work center view of both the Time Administration, as well as the Payroll Processing Work centers.
In this report, the administrator can specify the period for which they want to review the time account balances, as well as the specific overtime time accounts for which they want to review. The same report can also be used to track vacation time accounts, as well as view postings in the working time account.
The key figure “Time Account Posting” gives the number of hours that were posted in the time account on that date. The key figure “Valuated Quantity” gives the hours that one can see in the employee’s time sheet. Both values would be different if the “Percentage” in the Premium Pay configuration (as mentioned earlier) is not “100%”, i.e., there is either an over-or under compensation for the number of hours recorded.
Using this example, i am able to show how an administrator might configure the Business ByDesign system to automatically calculate overtime based on threshold values using the Time Recording Profile, and post these overtime hours in a Time Account. The time administrator can review these overtime hours using the Time Account Balances report, and make it available to sent to a payroll provider by downloading the report to excel.
If you have any questions, or other use cases you would like to discuss, please use the comments section below !
From an HR point of view this is very helpfull. But now the logical follow up question would be. How to deal with overtime in relation to project time recording. For instance: An employee records a total of 10 hours where 8 hours is the threshold for normal hours. The 2 hours of overtime are to be invoiced at a different rate.
We normally solve this by having the employee record time on multiple services in the time sheet. Maybe you have some insights in how to simplify this?
Thank you for the question. Yes, with the current features of Business ByDesign, the only way to invoice a different rate based on overtime is to have the employee record the overtime hours on a different service.
Would you please create an improvement request on our portal https://influence.sap.com/sap/ino/#/campaign/886/ ? It would be a great way to start a discussion with other customers and partners of Business ByDesign who also need such a feature in the product.
Thanks a lot,
Many thanks for this detailed blog, very useful indeed to simulation some use-case and validate the tests.
We are currently implementing the Overtime management for Denmark and have some specific business/country restriction cases to simulate which we are unable to comprehend in the ByDesign solution?
What is the best way to address them to you, we have opened an Incident with SAP Support as well.
Thanks in advance for your feedback.
Kindly outline your case here itself. This could be useful for other readers as well, in which case I will update the blog about the same.
Thanks a lot,
I tried to do it, but it’s not reflecting correctly in the system and not getting the correct overtime output. any Suggestions ?
Another Question. If i am having Rotating shift with different overtime rules for Morning Shift and night shift. How would i do it ?
Isolating the reason for missing overtime posting can be tricky, lets try to walk through a few steps to evaluate what could be missing:
Hope this helps !
Your feedback is highly appreciated.
But allow me to dig deep in the issue if you don't mind of course.
1- Period closure is correct.
2- Time recording profile is as screenshot below.
And below is the premium pay rules i have set and relating it to the Quote time account.
and here is the time account i have added.
And when i extract the account balance report it doesn't consider OT HRS time account type i have added although it auto generates the Premium pay type in the valuated result screen in the time file review and correct.
Your feedback and support is highly appreciated
The set up you've shown looks correct.
Can you please verify step 2 in my previous reply ? Could you please check if the overtime is being evaluated correctly in the Time Administration --> Time sheet --> Review and Correct Tab ?
If the duration of the time entries are greater than the Daily planned working time for that day, this should register as overtime in this UI. If the correct overtime duration is present here, then i would like you to check the time account assignment in the time file of the employee.
Now it's working properly.
The mistake i have done is that i entered the Time model in a wrong way.
but regarding the steps you have mentioned in your answer it's working properly.
Thank you so much for the support.
I tried to follow your guidance, however, It seemed not to work on my configuration, please take a look to see my configuration:
My scenario is When employee recorded their actual working time (like from 8:00 am to 8:00 pm), the system will automatically generate Overtime for them, and they can use the Overtime balance to submit for a day off or work more to compensate for their planned working time or. My overtime balance expectation will be like your example before:
Here is my configuration,
Working schedule: Clock time
Working time: 8:00 Am to 5:00 PM
Unpaid beak: 12:00 to 1:00 PM
Time Type: I will create 2 time types: one is Productive Time to recorded working time and the second is overtime account (Time type: Leave for the employee to be able to create time off base on Overtime balance)
Time account type: I set time account as Permanent for working time account, It will be used to recorded overtime balance
In the time account rule, I set Time Credit for working time account and Accrual for Quota time account:
And below is the premium pay rules I have set and relating it to the Quote time account.
Here is Time profile:
Time Recording Profile to the Employee
Your feedback and support is highly appreciated
Thanks and Best regards