Annual Salary Field Configuration

Purpose:

This is a configuration guide for Annual Salary field in IT0008. In a country like US, where you can have different pay cycles (e.g. Weekly, Biweekly, Semimonthly..), the annual salary field needs to be configured correctly in order to calculate correct annual salary from the period salary or vice-versa.

Configuration Guide:

You can find the option to configure annual salary under Personnel Management > Personnel Administration > Payroll Data > Basic Pay > Define Annual Salary.

The configuration is done in 4 steps:

Wage type for annual salary
Payment frequency for annual salary
Wage Type Characteristics
Relevant wage types for annual salary valuation
1> Define wage type for annual salary

2> Setup Payment frequency feature (Multiplier) for annual salary

3> Wage Type Characteristics

4> Relevant wage types for annual salary valuation

Step 1: Define wage type for annual salary

Here you need to define which wagetype will be used to cumulate the annual salary.

The standard wage type is ASAL, but you can use a custom wage type too.

You need to set the wagetype in feature ANSAL.

Example of feature ANSAL: Country Grouping > 10 (USA) > ASAL. This means for country grouping 10 (USA) is set to accumulate annual salary in wagetype ASAL.

Step 2: Setup Multiplier

The period salary (Weekly or biweekly) needs to be multiplied by an appropriate multiplier for calculation of annual salary.

e.g. If monthly salary is $10000 then Annual salary should be $10000 * 12. Here 12 is the multiplier.

This multiplier can be setup through feature PFREQ. It also takes into consideration the frequency of the payroll.

Example of feature PFREQ: Country Grouping > 10 (USA) > 52/26/24/13/12/04/01/02. The multiplier corresponds to payroll frequency weekly/ fortnightly/ half-monthly/ four-weekly/ monthly/ quarterly/ annually/ semi-annually. For four-weekly payroll the multiplier is set to 13.

Step 3: Wage Type Characteristics

Set Indirect valuation module for wagetype ASAL (Or custom wagetype) to ANSAL. Since ASAL is standard, no real configuration is needed.

Step 4: Relevant wage types for annual salary validation

This is the step where you configure indirect valuation module ANSAL for the wagetype ASAL (or custom wagetype). Here you define which wagetypes on IT0008 would contribute to ASAL (or custom wagetype).

How the annual salary config works:

Example: IT0008 is created for an US employee with bi-weekly salary (Salary WT 1000) with period salary amount $3000.

As per step 1, ASAL would be used for calculation of annual salary which inturn will use indirect evaluation module ANSAL (per step 3).

As per step 4 in the configuration, 1000 is configured as the  base wage type for ASAL. so ASAL = $3000 * Multiplier.

From step 2, the multiplier selected is 26. so ASAL = $3000 * 26 = $78000. This amount will show in the annual salary field on IT0008. 🙂

Note: SAP can also calculate period salary from annual salary entered on IT0008. There could be difference in few cents due to rounding rules.