There may be times when it is necessary to pay people who are on weekly, fortnightly, or monthly payrolls in advance for holiday periods. Employers may wish to do this on an individual or collective basis, such as when an entire factory shuts down for the summer period.

The Payroll Accounting component now provides the initial stage of a full solution for calculating advanced holiday pay (AHP). It allows an employee or selection of employees to be paid in advance for one or more payroll periods on one payment date defined by the user.

Advanced holiday pay can be calculated on an individual or collective basis. In both cases, processing is performed by the schema GNT0, although advanced holiday pay on a collective basis is handled by a process model. It is therefore important that the variant you specify for the payroll program in your process model contains the name of this schema.

This is decided by values in the AHPS structure. It is the current period that holds the payment calculations, not the period holding the actual pay date of the AHP.

• AHPN (Advanced Holiday Pay Non-Payment Period)

This is also decided by values held in the AHPS. These are the retro periods, where the wage types are being brought forward.

As no calculation of payments is made in the retro periods, the personnel calculation rule GHP1 (Advanced Holiday Payment Differences) takes any /1nn wage types in the IT in the retro periods and adds them into both the DT and IT as the corresponding /Hnn wage types. In the current period, the personnel calculation rule GHP2 (Generate /J adjustments from /H differences for advanced payments) takes the /Hnn wage types from the DT and creates corresponding /Jnn wage types and adds the values to the corresponding /1nn wage types. This enables calculation of tax, National Insurance, court orders, and pensions according to AHP requirements.

To use the advanced holiday pay functionality, you must set up your system appropriately by carrying out the steps under Advanced Holiday Pay in Customizing for Payroll: United Kingdom.

Calculating advanced holiday pay involves one or more retrocalculation periods and one current period. The process used here therefore differs to normal payroll practice, where the first period in which the payment is made is normally considered the current period, with payments being brought back from the future holiday periods. However, as the SAP payroll driver can only process payroll periods in strict order (i.e. earliest first), the last period is treated as the current period, even though the pay date is not in that period, and prior periods are treated as retro periods, from which wage types are brought forward.

This initial stage of AHP functionality has the following limitations:

1. Due to the functionality of the SAP payroll driver, advanced payments cannot be brought back and recorded in the results of the period in which the payment is actually made.
2. The dialog box displaying the payment periods to be paid in advance currently only shows periods in the current tax year. However, AHP payments made across tax year-end (often the case at Easter) cannot currently be handled by transaction PUOC (Off-Cycle Workbench).
3. It is not uncommon for a person to receive AHP well in advance of when the holiday is actually due.



In week 10, the employee receives his normal pay for week 10 plus AHP for weeks 13 and 14.
In week 11, he is paid normally for week 11, likewise in week 12.

The SAP payroll driver, however, cannot handle payroll periods out of sequence.

4. A person may be paid AHP but then actually work those periods, in effect being paid twice (if holiday entitlement is bought back, for example). As these periods have already been paid, the payroll driver will not allow a second actual period to be created, with the second payment.
5. It may be the case that certain payments, such as overtime, are not to be included in the AHP but paid on the usual pay date.