Payroll Customization Steps
1. Create Payroll Area
IMG Personnel Management Personnel Administration Organizational Data Organizational Assignment
2. Check Default Payroll Area
IMG Personnel Management Personnel Administration Organizational Data Organizational Assignment
( Feature ABKRS for defaulting Payroll Area )
3. Create control record
IMG Personnel Management Personnel Administration Organizational Data Organizational Assignment
4. Define Period Parameters
IMG Payroll Payroll: India Basic Settings Payroll Organization
5. Define Date Modifiers
IMG Payroll Payroll: India Basic Settings Payroll Organization
( To specify payments periods )
6. Check Payroll Accounting Area
IMG Payroll Payroll: India Basic Settings Payroll Organization
7. Generate Payroll Period
IMG Payroll Payroll: India Basic Settings Payroll Organization
8. Generate Calendar for Cumulations
IMG Payroll Payroll: India Basic Settings Payroll Organization
9. Define Personnel Area and Subarea Groupings for Tax
IMG Payroll Payroll: India Tax Basic Settings
10. Assign Tax Groupings for Personnel Areas and Subareas
IMG Payroll Payroll: India Tax Basic Settings
11. Define EE Subgroup Grouping for PCR and Coll.Agrmt.Prov.
IMG Personnel Management Personnel Administration Payroll Data Basic Pay
12. Check Pay Scale Type
IMG Personnel Management Personnel Administration Payroll Data Basic Pay
13. Check Pay Scale Area
IMG Personnel Management Personnel Administration Payroll Data Basic Pay
14. Check Assignment of Pay Scale Structure to Enterprise Structure
IMG Personnel Management Personnel Administration Payroll Data Basic Pay
15. Determine default for pay scale data
IMG Personnel Management Personnel Administration Payroll Data Basic Pay
( Feature TARIF – For defaulting Pay scale type and Pay scale area )
16. Set up payroll period for collective agreement provision
IMG Personnel Management Personnel Administration Payroll Data Basic Pay
17. Create wage type catalog
IMG Personnel Management Personnel Administration Payroll Data Basic Pay Wage Types
18. Check wage type group 'Basic Pay'
IMG Personnel Management Personnel Administration Payroll Data Basic Pay Wage Types
19. Check wage type text
IMG Personnel Management Personnel Administration Payroll Data Basic Pay Wage Types Check
Wage Type Catalog
20. Check entry permissibility per infotype
IMG Personnel Management Personnel Administration Payroll Data Basic Pay Wage Types Check
Wage Type Catalog
21. Check wage type characteristics
IMG Personnel Management Personnel Administration Payroll Data Basic Pay Wage Types Check
Wage Type Catalog
22. Revise Pay Scale Groups and Levels
IMG Personnel Management Personnel Administration Payroll Data Basic Pay
23. Define valuation of base wage types
IMG Personnel Management Personnel Administration Payroll Data Basic Pay Wage Types
24. Employee Subgroups for Primary Wage Type
IMG Personnel Management Personnel Administration Payroll Data Basic Pay Wage Types
25. Personnel Subareas for Primary Wage Type
IMG Personnel Management Personnel Administration Payroll Data Basic Pay Wage Types
26. Define Wage Type Permissibility for each PS and ESG
IMG Personnel Management Personnel Administration Payroll Data Basic Pay Wage Types
27. Revise Default Wage Types
IMG Personnel Management Personnel Administration Payroll Data Basic Pay Wage Types
28. Enterprise Structure for Wage Type Model ** LGMST
IMG Personnel Management Personnel Administration Payroll Data Basic Pay Wage Types
(Feature LGMST – Defaulting wage type in IT 0008)
29. Define Pay Scale Groupings for Allowances
IMG Payroll Payroll: India Pay Scale Groupings
30. Assign Pay Scale Groupings for Allowances
IMG Payroll Payroll: India Pay Scale Groupings
31. Assign Basic Wage Types to Grouping for Allowances
IMG Payroll Payroll: India Basic Salary for India
32. Assign Wage Type Model for Pay Scale Grouping for Allowances
IMG Payroll Payroll: India Reimbursements, Allowances and Perks
(Format nn/XXXXX where nn => No. of wage type in IT 0008 – max 20, and XXXXX – Allowance grouping)
33. Maintain Default Wage Types for Basic Pay
IMG Payroll Payroll: India Reimbursements, Allowances and Perks
34. Maintain Wage Type Characteristics
IMG Payroll Payroll: India Reimbursements, Allowances and Perks
35. Maintain Pay Scale Groups and Levels
IMG Payroll Payroll: India Reimbursements, Allowances and Perks
36. Maintain Valuation of Base Wage Types
IMG Payroll Payroll: India Reimbursements, Allowances and Perks
37. Maintain Allowance Rules based on Slabs
IMG Payroll Payroll: India Reimbursements, Allowances and Perks
38. Calculate Eligibility for RAPs
IMG Payroll Payroll: India Reimbursements, Allowances and Perks
Gratuity Customization
1. Maintain Gratuity Trust ID
IMG Payroll Payroll: India Retirement Benefits Gratuity
2. Maintain Gratuity Contrib. Freq. and Related Wage Types
IMG Payroll Payroll: India Retirement Benefits Gratuity
3. Define Contribution Rates for Gratuity
IMG Payroll Payroll: India Retirement Benefits Gratuity
4. Maintain the Eligibility Years for Gratuity
IMG Payroll Payroll: India Retirement Benefits Gratuity
5. Check for Gratuity Contribution
IMG Payroll Payroll: India Retirement Benefits Gratuity
Superannuation Customization
1. Maintain Superannuation Trust ID
IMG Payroll Payroll: India Retirement Benefits Superannuation
2. Maintain Superannuation Contrib. Freq and Rel. Wage Types
IMG Payroll Payroll: India Retirement Benefits Superannuation
3. Define Contribution Rates for Superannuation
IMG Payroll Payroll: India Retirement Benefits Superannuation
4. Maintain Eligibility Details for Superannuation
IMG Payroll Payroll: India Retirement Benefits Superannuation
5. Check for Superannuation Contributions
IMG Payroll Payroll: India Retirement Benefits Superannuation
Provident Fund
1. Define Trust Details for Provident Fund
IMG Payroll Payroll: India Statutory Social Contribution Provident Fund
2. Assign Company Rates for Provident Fund
IMG Payroll Payroll: India Statutory Social Contribution Provident Fund
3. Define PF Trust Validity Period
IMG Payroll Payroll: India Statutory Social Contribution Provident Fund
4. Maintain Contribution Details for Provident Fund
IMG Payroll Payroll: India Statutory Social Contribution Provident Fund
5. Define Contribution type for Statutory rates for Provident Fund
IMG Payroll Payroll: India Statutory Social Contribution Provident Fund
ESI
1. Maintain ESI Eligibility Limit
IMG Payroll Payroll: India Statutory Social Contribution Employees' State Insurance
2. Define Personnel Area and Subarea Groupings for ESI
IMG Payroll Payroll: India Statutory Social Contribution Employees' State Insurance
3. Assign ESI Groupings for Personnel Area and Subarea
IMG Payroll Payroll: India Statutory Social Contribution Employees' State Insurance
4. Maintain Contribution Rates for ESI
IMG Payroll Payroll: India Statutory Social Contribution Employees' State Insurance
Statutory Social Contribution
Provident Fund
IMG Payroll Payroll: India Statutory Social Contribution Provident Fund
1. Define Trust Details for Provident Fund
2. Assign Company Rates for Provident Fund
3. Define PF Trust Validity Period
4. Maintain Contribution Details for Provident Fund
5. Define Contribution type for Statutory rates for Provident Fund
Employees' State Insurance
1. Maintain ESI Eligibility Limit
2. Define Personnel Area and Subarea Groupings for ESI
3. Assign ESI Groupings for Personnel Area and Subarea
4. Maintain Contribution Rates for ESI
Professional Tax
IMG Payroll Payroll: India Professional Tax
1. Define Professional Tax Grouping Details
2. Assign PTax Groupings for Personnel Areas and Subareas
Company Loans
IMG Payroll Payroll: India Company Loans Master Data
1. Create a Loan Type
2. Assign Repayment Type
3. Create Loan Conditions
4. Maintain Deduction Details Under Section 24
Car and Conveyance
IMG Payroll Payroll: India Car and Conveyance
1. Define Vehicle Details
2. Define Conveyance Types
3. Define Amounts and Numbers for Car Schemes
4. Assign Type and Age of Car for Car Schemes
5. Assign Eligibility Criteria for Conveyance Allowance
View to be maintained
V_T512Z Permitted Wage Types (Infotype Permissibility)
V_T511 Wage Type Characteristics ( Inval A, B,… )
V_T539A Default Wage Types for Basic Pay
V_T7INA9 Reimbursement allowances perks - eligibility and calculation
V_T7INT9 Taxability of wage types
V_T510 Pay Scale Groups
V_512W_D Processing Classes, Cumulations, and Evaluation Classes
V_T7INB1 Basic Wages
V_T7INT7 Tax codes for tax exemptions
V_T511K Payroll Constants
V_T511P Payroll Constants
V_511_B Permissibility of Wage Types
V_T7INAA Salary year for pay scale grouping for allowances
V_T582L Infotypes - country-specific settings
V_T7INA1 Pay scale grouping for allowances
V_T554C Absence Valuation
V_512W_B Valuation Bases
Some useful Tips:
1. Wage types is to be factored when LWP/DOJ/DOL is taken:
SM31 – V_512W_D
Maintain processing class 10 with specification = 0 - No reduction
Maintain processing class 10 with specification = 1 - Reduction with factor /801
2. To make wage type taxable / non-taxable:
SM31 – V_512W_D
Remove flag for cumulation class 24 and 25 for making wage type non-taxable.
If either of the flag is maintained, it becomes taxable.
3. To define wage type as perk wage type:
SM31 – V_512W_D
Maintain evaluation class 9 (Perks) with the proper specification from the dropdown for perks.
This reflects in Income Tax Form16 – Form 12BA (Perk details)
Also remove flag for cumulation class 1 and 10, and maintain flag for cumulation class 25.
4. To make wage type taxable but should not affect net salary (/560):
SM31 – V_512W_D
Remove flag for cumulation class 1 and 10, and maintain flag for cumulation class 25.
5. All irregular income wage types do not form basis for Perk calculation; like Housing perk or Car perk. To make such
wage types as the basis for perk, maintain flag for cumulation class 34.
6. For all wage types, monthly regular and monthly irregular incomes, to reflect properly in Form16 annexure, maintain
evaluation class 6 with appropriate specification from the dropdown. For perk wage types, the specification for
evaluation class 6 is not to be maintained.
