1 Objectives and Purpose

23

1.1 What Makes US Payroll Unique?

24

1.1.1 Functional Uniqueness

24

1.1.2 Technical Uniqueness

27

1.2 The US Payroll Process

29

1.3 Components of SAP US Payroll

30

1.4 Summary

32

2 US Payroll Infotypes: Master Data and Transaction Data

33

2.1 Master Data: Conceptual Clarity

33

2.2 Retroactive Accounting

34

2.3 Employee Master Data for US Payroll

36

2.3.1 Infotype 0007: Work Schedules

40

2.3.2 Infotype 0008: Basic Pay

40

2.3.3 Infotype 0009: Bank Details

41

2.3.4 Infotype 2010: Employee Remuneration

42

2.3.5 Infotype 0207: Residence Tax

43

2.3.6 Infotype 0208: Work Tax

43

2.3.7 Infotype 0167: Health Plans

44

2.3.8 Infotype 0057: Membership Fees

44

2.4 Employee Transaction Data: US Payroll

45

2.4.1 Infotype 0014: Earnings/Deductions Transaction Data

49

2.4.2 Infotype 0169: Savings Plans

50

2.4.3 Infotype 0015: Additional Payments and Deductions

50

2.4.4 Infotype 0267: Bonus and Off-Cycle

51

2.4.5 Infotype 0011: External Bank Transfer

52

2.4.6 Infotype 0210: Changes to W-4 Data

53

2.4.7 Infotype 0234: Additional Withholding Info

53

2.4.8 Infotype 0235: Other Taxes

54

2.4.9 Infotype 0554: Hourly Rate Per Assignment

55

2.4.10 Infotype 0027: Cost Center Distribution

55

2.5 Pre-Payroll Data Verification

56

2.6 Summary

59

3 Wage Types

61

3.1 Overview of a U.S. Paystub and the Concept of Wage Types

61

3.2 Lifecycle of a Wage Type and U.S. Wage Type Catalog

64

3.2.1 Wage Type Categories

68

3.2.2 Three Elements of a Wage Type

69

3.2.3 Wage Type Catalog

71

3.2.4 Wage Type Tables

74

3.3 Step-by-Step Configuration of a Wage Type

74

3.3.1 Earnings

75

3.3.2 Deductions

83

3.3.3 Taxes

89

3.3.4 Net Pay

93

3.3.5 Wage Type Configuration Tool

95

3.4 Testing Wage Types

97

3.5 Advanced Topics on Wage Types

101

3.5.1 Handling Cumulations

101

3.5.2 Setting Up Payment Models

103

3.5.3 Priority and Arrears

104

3.5.4 Posting of Wage Types

109

3.5.5 Valuation of Wage Types

122

3.6 Summary

123

4 Schemas and Rules

125

4.1 Examining the U.S. Payroll Driver (RPCALCU0)

125

4.2 Working with U.S. Schema U000

127

4.2.1 Schemas

130

4.2.2 Subschemas

130

4.2.3 U.S. Subschemas

132

4.3 Why, When, and How to Change the U.S. Schema

143

4.3.1 Copy and Modify Schema U000 using the Schema Editor

145

4.3.2 Running an Error-Free Schema

147

4.4 Overview of the U.S. Public Sector Schema Functionality

152

4.4.1 NRA: Non-Resident Alien Processing

153

4.4.2 Savings Bonds Processing

154

4.4.3 Public Sector Savings Plans: 403(B), 457(B)

154

4.4.4 Employer Benefits and Tax Allocation Rules

155

4.5 Overview of Non-Profit Organization (NPO) Payroll

155

4.6 Writing Rules in US Payroll

156

4.6.1 The Rules Editor

157

4.6.2 Creating Simple Rules

159

4.6.3 Creating Complex Rules

162

4.6.4 Running Error-Free Rules

170

4.7 Summary

173

5 Benefits Integration

175

5.1 Integration of US Benefits with US Payroll

175

5.1.1 Input

176

5.1.2 Processing

177

5.1.3 Output

177

5.2 Health Plan Integration

179

5.3 Savings Plan Integration

183

5.4 Insurance Plan Integration

190

5.5 Flexible Spending Account Integration

195

5.6 Sending Data and Remittance to Benefits Providers

197

5.6.1 Health Plans

197

5.6.2 Insurance Plans

198

5.6.3 Savings Plans

198

5.6.4 Sending Remittance

198

5.6.5 Sending Data

199

5.7 Summary

199

6 Time Management and Payroll Integration

201

6.1 Definitions

201

6.2 Time-Payroll Integration Infotypes

204

6.3 Time and Payroll Integration Scenarios

205

6.3.1 Scenario 1: SAP CATS + SAP Time Evaluation + SAP Payroll

207

6.3.2 Scenario 2: External Time Clocking + External Time Evaluation + SAP HCM and SAP Payroll

210

6.3.3 Scenario 3: External Time Clocking + SAP HCM and SAP Time Evaluation + SAP Payroll

212

6.3.4 Scenario 4: External Time Clocking + SAP CATS and SAP Time Evaluation + SAP Payroll

214

6.4 Challenges of Time Integration with Payroll

214

6.4.1 Using Custom Infotypes

214

6.4.2 Override Jobs

215

6.4.3 Override Cost Centers

215

6.4.4 Reconciliation Between External Time Clocking and SAP Payroll

216

6.5 Time Schemas

217

6.6 FLSA and Rate Calculation Impact

219

6.6.1 Minimum Wage

220

6.6.2 Overtime

220

6.6.3 Tracking of Hours Worked and Record-Keeping

220

6.7 Summary

221

7 Garnishments

223

7.1 Configuring Garnishments

224

7.2 Disposable Net Income

228

7.2.1 Definition of Disposable Net Income

228

7.2.2 Example

230

7.3 Managing Wage Types for Garnishments

232

7.3.1 Garnishment Deduction Wage Types

232

7.3.2 Impact of Other Wage Types

233

7.4 Garnishment Subschema

233

7.4.1 Rule UGIT

234

7.4.2 Rule UGDN

236

7.4.3 Function UGARN

238

7.5 Summary

239

8 Tax Processing

241

8.1 Introduction to U.S. Tax Processing

241

8.1.1 Tax Infotypes

242

8.1.2 Earnings and Deductions

244

8.1.3 Relevant Processing Classes for Wage Types

245

8.2 Tax Models

247

8.2.1 Tax Authorities

247

8.2.2 Tax Areas

248

8.2.3 Tax Types

249

8.2.4 Tax Classes

250

8.2.5 Tax Models

250

8.3 Year-End Tax Adjustments and Workbench

255

8.3.1 Starting the Year-End Workbench

257

8.3.2 Running Payroll

262

8.3.3 Verification

264

8.4 Overview of the Tax Reporter

265

8.4.1 Preparation Work

265

8.4.2 Quarterly Reports

266

8.4.3 Annual Reports

268

8.5 Tax Services

270

8.6 BSI Tax Factory

271

8.6.1 Installing BSI Tax Factory 9.0

272

8.6.2 Configuration of SAP for BSI

273

8.6.3 How to Apply BSI TUBS

274

8.6.4 Tax Locator

274

8.6.5 Handling Reciprocity

275

8.7 Summary

277

9 Advanced Topics

279

9.1 Overpayments and Claims Handling

279

9.1.1 Why Claims Are Generated

280

9.1.2 Identifying Claims in Payroll

282

9.1.3 Strategy with Claims

284

9.1.4 Clearing Claims: Payroll-Forgiven

284

9.1.5 Clearing Claims: Payroll-Not-Forgiven

285

9.1.6 Clearing Claims: Accounts Taxes (Employee Pays Single Check)

286

9.1.7 Clearing Claims: Accounts Taxes (Employee Pays by Payment Plan)

288

9.2 New Overpayments Functionality

290

9.2.1 Differences Between Old and New Functionality

290

9.2.2 Running New Overpayments Functionality

292

9.3 Accruals

298

9.3.1 Accruals Configuration

299

9.3.2 Accruals Process and Posting

302

9.4 Interfacing with Third-Party Payroll Systems: Gross to Net

306

9.5 Third-Party Remittance (Accounts Payable Processing)

312

9.5.1 Required Configuration

313

9.5.2 Financial Account Management

314

9.5.3 Running a Third-Party Process

316

9.6 Expatriate Payroll

319

9.6.1 Scenario 1: Payroll in SAP US Payroll for an Expatriate

319

9.6.2 Scenario 2: Payroll in SAP US Payroll and SAP Germany Payroll for an Expatriate

320

9.7 Implementation Tips for US Payroll

321

9.7.1 Go-Live Calendar

321

9.7.2 Volumes and Complexity

323

9.7.3 Resource Planning and Knowledge Transfers

323

9.8 Summary

324

10 Cutover, Implementation, and Post-Go-Live

325

10.1 Implementation Lifecycle

325

10.1.1 Structure to Discuss Payroll Implementation and Cutover

326

10.1.2 Implementation Challenges for Payroll

327

10.2 Cutover Planning

331

10.2.1 Configuration Teams

332

10.2.2 Payroll Operations

333

10.2.3 Interface Management

333

10.2.4 Training and Change Management

334

10.2.5 Finance and Other Integrated Applications

335

10.2.6 Security and Roles

335

10.2.7 Legacy Teams

335

10.2.8 Technical Teams

336

10.3 Typical Cutover Plan

336

10.3.1 Step 1: Pre-Cutover Activities and Tasks

337

10.3.2 Step 2: Cutover of Configuration

337

10.3.3 Step 3: Conversions

338

10.3.4 Step 4: Business Cutover

339

10.3.5 Step 5: Go-Live

340

10.3.6 Step 6: Post-Go-Live

341

10.3.7 Typical Implementation Challenges

341

10.4 Testing

342

10.4.1 System Integration Test

343

10.4.2 Parallel Testing

345

10.5 Post-Go-Live Challenges for Payroll

352

10.5.1 Housekeeping Activities

355

10.5.2 Best Practices to Maintain Wage Types, Schemas, and Rules

358

10.6 Summary

359

Appendices

361

A US Payroll Schema U000

363

B Wage Type Template

375

B.1 Part 1: To Be Completed by Requestor

375

B.2 Part 2: To Be Completed by Person Configuring

376

B.3 Approvals and Testing

378

C Commonly Used Technical Wage Types

379

D Commonly Used Model Wage Types

409

E Commonly Used Processing Classes and Specifications

427

F Useful Payroll Operations

439

G The Author

449