Introduction
Leave liability or leave provisioning in Australia is a method which enables employers to project their liability in terms of the compensation due to their employees for long service leave, annual leave and any other leave types that are eligible for pay out at the time of termination.
Leave provisioning or leave liability in SAP Payroll Australia is designed to work with the absences and absence quotas. It takes into account the data for the employee present in the different info types such as IT 1 (Org assignment), IT 7 (Work schedule), IT 8 (Basic Pay), IT 2006 (Absence Quotas) and to check the cost distribution required, if any, from IT 27 (Cost distribution). It also needs to take into consideration the payroll results present in the latest pay run result table (RT).
Leave Liability Process Flow:
The general SAP PY-AU leave liability process flow in brief is as below:
Leave Liability Replication Configuration Considerations:
Having understood the basic process behind the leave liability calculation in SAP PY-AU, the next step is to understand the leave liability replication for Australia given the scenario of implementing EC Payroll with SF EC in place.
There are two things to consider here, for Australia:
In H1 2020 EC Payroll release, the leave liability feature is now enabled for public sector companies in Australia.
Setting up the leave liability replication for EC Payroll Australia involves a few pre-requisites as listed below:
To begin with the replication configuration, firstly employee central side set up will be required as stated below. These settings will be made in the employee central admin center to enable leave liability replication.
A] DATA REPLICATION CONFIGURATION (EMPLOYEE CENTRAL CONFIG)
Preferably Configured by an Employee Central Consultant
The data replication configuration is created based on whether you would like to replicate only absences (2001) or you would like to replicate both, absences into 2001 and the time account snapshots into 2010, as part of the data replication configuration. Based on this consideration, the two replication scenarios would be:
How is this configuration achieved in employee central?
B] TIME ACCOUNT TYPES (EMPLOYEE CENTRAL CONFIG)
Preferably Configured by an Employee Central Consultant
As mentioned earlier in the article, the creation of the Time Account Snapshots are required for the leave liability replication from EC to EC Payroll. This will allow for the snapshots to be created by a time off calendar run. The settings that are most important for the correctness of the leave liability calculations is to set up the time account Snapshots Allowed to Yes and then remove the inclusion of pending leave requests from being considered while calculating the balances for leave liability. Accrual frequency period can be set up from a range of values like annual, monthly, biweekly, twice a month etc.
C] TIME ACCOUNT SNAPSHOTS (EMPLOYEE CENTRAL CONFIG)
Preferably Configured by an Employee Central Consultant
The creation of time account snapshots are critical for leave liability calculations. The end date should indicate the last day of the month for replication of leave liabilities. If the leave balances are to be shown on the pay statement then the end date should be mentioned as the pay period end date. To achieve this objective, the Snapshot flags to be selected are Snapshots as of Pay Period End and Snapshots as of accounting period end.
An important aspect to decode no replication occurring for leave liability in IT 2010 is that the replication will not trigger the IT 2010 creation if the time balance is zero for accruals or entitlements in the time account snapshot, the balance is less than 0.01 for As of Period End Snapshot or if the balance is less than 0.00001 for As of Accounting Period End Snapshot
D] SETTINGS IN EMPLOYEE CENTRAL PAYROLL (EMPLOYEE CENTRAL PAYROLL CONFIG)
Preferably Configured by an Employee Central Payroll Functional Consultant
The settings in EC Payroll are pretty straightforward with a linear relation between the various steps required to replicate the leave liabilities from EC to ECP Australia.
a) Firstly, you create wage types in ECP which will be tagged to IT 2010.
b) Set up the configuration wherein you will map the respective time account types set up in EC time off with the corresponding wage types configured in ECP for IT 2010 in step (a)
c) Finally, you will configure the mapping between the wage types set up in ECP with the leave liability information already set up for ECP PY-AU.
Elaborating on each of these steps:
a) Firstly, you create wage types in ECP which will be tagged to IT 2010 in V_T512Z table.
Ensure the wage types in ECP are created for the MOLGA 13 and they are present in the permissibility table for IT 2010 in V_T512Z. There is an additional step to ensure the replication of leave liabilities into IT 2010 is done correctly. As per the Australian leave liability requirements, the precision of 5 decimals is required for the wage types in IT 2010 whose amount field is multiplied by 1000 when it is filled during replication. Also, ensure to choose the same time unit as the time account type set up in EC time off.
In case of wage types that are set up in ECP for balance printing on pay statements, the precision of 5 decimals is not required. This requires only a precision of 2 decimal places.
b) Set up the configuration wherein you will map the respective time account types set up in EC time off with the corresponding wage types configured in ECP for IT 2010 in step (a)
This is done in the integration settings for EC Payroll node in SPRO wherein the EC time off time account types are mapped to the wage types set up in EC Payroll. The specific branch under Assignment of Code Values For Point-To-Point Replication is the one where the mapping actually happens. Once this is setup, it paves way for our final leave liability replication through mapping of the wage types to leave liability information.
c) Finally, you will configure the mapping between the wage types set up in ECP with the leave liability information already set up for ECP PY-AU.
The setup is completed under Map EC Leave Balance Info to ECP Wage Types under Leave Provisions node in Payroll Australia in ECP SPRO path. This leave liability replication feature is currently enabled for public sector companies in Australia. Under Termination and Redundancy (V_HREC_T5QPBSTLM) in Australia Public Sector HCM choose Map EC Leave Balance Info to ECP Wage Types for Termination Organizer and assign the wage types based on the absence quotas and leave balance types to the EC leave balance hours.
Conclusion:
The leave liability replication for Australian public sector enterprises does add ease to the overall ECP configuration. This country specific update in 1H 2020 is surely a winner in EC - ECP replication.
Leave liability or leave provisioning in Australia is a method which enables employers to project their liability in terms of the compensation due to their employees for long service leave, annual leave and any other leave types that are eligible for pay out at the time of termination.
Leave provisioning or leave liability in SAP Payroll Australia is designed to work with the absences and absence quotas. It takes into account the data for the employee present in the different info types such as IT 1 (Org assignment), IT 7 (Work schedule), IT 8 (Basic Pay), IT 2006 (Absence Quotas) and to check the cost distribution required, if any, from IT 27 (Cost distribution). It also needs to take into consideration the payroll results present in the latest pay run result table (RT).
Leave Liability Process Flow:
The general SAP PY-AU leave liability process flow in brief is as below:
Leave Liability Australia Process Flow
Leave Liability Replication Configuration Considerations:
Having understood the basic process behind the leave liability calculation in SAP PY-AU, the next step is to understand the leave liability replication for Australia given the scenario of implementing EC Payroll with SF EC in place.
There are two things to consider here, for Australia:
- In employee central payroll, there is a provision to calculate the leave liability of employees only in a monthly accounting period. Hence, consider that you have employees in your organization who are on a monthly payroll cycle – for these employees, the employee central payroll system will calculate the leave liability every month. However, for a set of employees in your manufacturing hub who are say, on a weekly or fortnightly pay cycle, the leave liability calculation in the system is done in one period in the month. Configuration can be set up to indicate which pay period would be taken into consideration for leave liability calculation for a shorter payroll cycle that differs from a monthly payroll cycle.
- It is a legal requirement in Australia that an employee’s pay slip should indicate the balances of leave accruals and entitlements, usually at the end of the pay period. For this purpose, the accruals and entitlements of the leave quotas should be replicated into EC payroll at the end of each pay period. This will need to be done at the end of each pay period even if the said pay period is less than a month, for e.g. weekly, fortnightly etc.
In H1 2020 EC Payroll release, the leave liability feature is now enabled for public sector companies in Australia.
Setting up the leave liability replication for EC Payroll Australia involves a few pre-requisites as listed below:
- Employee central and employee central payroll is set up and functional with time off replication working correctly in the system
- The function HCM_SFEC_TDEC2HR should be activated which will enable the employee central time off and employee central payroll integration
To begin with the replication configuration, firstly employee central side set up will be required as stated below. These settings will be made in the employee central admin center to enable leave liability replication.
A] DATA REPLICATION CONFIGURATION (EMPLOYEE CENTRAL CONFIG)
Preferably Configured by an Employee Central Consultant
The data replication configuration is created based on whether you would like to replicate only absences (2001) or you would like to replicate both, absences into 2001 and the time account snapshots into 2010, as part of the data replication configuration. Based on this consideration, the two replication scenarios would be:
- Replication of absences created in EC time off into IT 2001
- Replication of absences created in EC time off into IT 2001 and the time account snapshots into IT 2010 as wage types set up in EC payroll configuration. At least one data replication configuration has to be created with the scenario (b) as described here for Australia leave liability calculation and replication to happen in EC payroll.
How is this configuration achieved in employee central?
- Under Manage Data in Admin Center, select DataReplication Configuration in Create New
- Give it a suitable name and select the replication target system, for e.g. the one where your EC payroll system is implemented.
- The two main considerations while setting up DataReplication Configuration is to choose Employee Absence Data under replication content type and replication scenario as Absences with time account snapshot to IT 2010
B] TIME ACCOUNT TYPES (EMPLOYEE CENTRAL CONFIG)
Preferably Configured by an Employee Central Consultant
As mentioned earlier in the article, the creation of the Time Account Snapshots are required for the leave liability replication from EC to EC Payroll. This will allow for the snapshots to be created by a time off calendar run. The settings that are most important for the correctness of the leave liability calculations is to set up the time account Snapshots Allowed to Yes and then remove the inclusion of pending leave requests from being considered while calculating the balances for leave liability. Accrual frequency period can be set up from a range of values like annual, monthly, biweekly, twice a month etc.
C] TIME ACCOUNT SNAPSHOTS (EMPLOYEE CENTRAL CONFIG)
Preferably Configured by an Employee Central Consultant
The creation of time account snapshots are critical for leave liability calculations. The end date should indicate the last day of the month for replication of leave liabilities. If the leave balances are to be shown on the pay statement then the end date should be mentioned as the pay period end date. To achieve this objective, the Snapshot flags to be selected are Snapshots as of Pay Period End and Snapshots as of accounting period end.
An important aspect to decode no replication occurring for leave liability in IT 2010 is that the replication will not trigger the IT 2010 creation if the time balance is zero for accruals or entitlements in the time account snapshot, the balance is less than 0.01 for As of Period End Snapshot or if the balance is less than 0.00001 for As of Accounting Period End Snapshot
D] SETTINGS IN EMPLOYEE CENTRAL PAYROLL (EMPLOYEE CENTRAL PAYROLL CONFIG)
Preferably Configured by an Employee Central Payroll Functional Consultant
The settings in EC Payroll are pretty straightforward with a linear relation between the various steps required to replicate the leave liabilities from EC to ECP Australia.
a) Firstly, you create wage types in ECP which will be tagged to IT 2010.
b) Set up the configuration wherein you will map the respective time account types set up in EC time off with the corresponding wage types configured in ECP for IT 2010 in step (a)
c) Finally, you will configure the mapping between the wage types set up in ECP with the leave liability information already set up for ECP PY-AU.
Elaborating on each of these steps:
a) Firstly, you create wage types in ECP which will be tagged to IT 2010 in V_T512Z table.
Ensure the wage types in ECP are created for the MOLGA 13 and they are present in the permissibility table for IT 2010 in V_T512Z. There is an additional step to ensure the replication of leave liabilities into IT 2010 is done correctly. As per the Australian leave liability requirements, the precision of 5 decimals is required for the wage types in IT 2010 whose amount field is multiplied by 1000 when it is filled during replication. Also, ensure to choose the same time unit as the time account type set up in EC time off.
In case of wage types that are set up in ECP for balance printing on pay statements, the precision of 5 decimals is not required. This requires only a precision of 2 decimal places.
b) Set up the configuration wherein you will map the respective time account types set up in EC time off with the corresponding wage types configured in ECP for IT 2010 in step (a)
This is done in the integration settings for EC Payroll node in SPRO wherein the EC time off time account types are mapped to the wage types set up in EC Payroll. The specific branch under Assignment of Code Values For Point-To-Point Replication is the one where the mapping actually happens. Once this is setup, it paves way for our final leave liability replication through mapping of the wage types to leave liability information.
c) Finally, you will configure the mapping between the wage types set up in ECP with the leave liability information already set up for ECP PY-AU.
The setup is completed under Map EC Leave Balance Info to ECP Wage Types under Leave Provisions node in Payroll Australia in ECP SPRO path. This leave liability replication feature is currently enabled for public sector companies in Australia. Under Termination and Redundancy (V_HREC_T5QPBSTLM) in Australia Public Sector HCM choose Map EC Leave Balance Info to ECP Wage Types for Termination Organizer and assign the wage types based on the absence quotas and leave balance types to the EC leave balance hours.
Conclusion:
The leave liability replication for Australian public sector enterprises does add ease to the overall ECP configuration. This country specific update in 1H 2020 is surely a winner in EC - ECP replication.
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