Partial Period Remuneration (Factoring)

Partial Period Remuneration (Factoring)

Purpose

If an employee did not work for the whole payroll period, then a partial remuneration is calculated. Only the current period is considered. Factoring is used in the following cases:

To reduce payments made to an employee because he or she joins, leaves, or is absent from the company during a period.

To calculate remuneration for a specific period because of substitutions, changes in basic pay, organizational reassignments, or changes in the personal work schedule.

To calculate cost accounting wage types for an exact period. This will enable you to decide how much remuneration an employee receives for work done and for paid absences. The different amounts can be assigned to different cost centers.

Scope of Functions

To determine an employee’s exact remuneration the remuneration amount is multiplied by a partial period factor. The partial period factor can be calculated using different methods:

Payment method
Deduction method
Hybrid of Payment and Deduction Methods
PWS Method
All or Nothing Method

You find guidelines on which method to select in the collective agreement, the company agreement and in the documentation on the individual methods. The question of which method to use is extremely important, particularly if payroll is run for monthly periods.

The standard system contains a few examples for partial period factoring that are needed to determine the partial period factoring. You can either use them as they are, or look in Payroll customizing under Factoring to adapt and enhance them so they meet your company’s specific requirements. Using create wage types for cost accounting you assign the wage types to different wage types for cost accounting.

The following infotypes are evaluated for factoring in payroll accounting:

Actions infotype (0000)

Organizational Assignment infotype (0001)

Planned Working Time infotype (0007)

Basic Pay infotype (0008)

Recurring Payments and Deductions infotype (0014)

Additional Payments infotype (0015)

Absences infotype (2001)

Substitutions infotype (2003)