Pay Scale Grouping for Allowances 
Purpose
Pay Scale Grouping for Allowances defines groups of employees. Each of these groups share a set of characteristics, to which a standard set of rules can be applied.
Pay Scale Grouping for Allowances determines the
· Compensation structure applicable to an employee
· Value of compensation for an employee
· Procedures for payroll processing
Determining the Pay Scale Grouping for Allowances is the first step in the configuration of Payroll India. You cannot define the wage types also without defining Pay Scale Grouping for Allowances.
The Pay Scale Grouping for Allowances depends on certain pay parameters. The system provides you with the following five pay parameters:
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1. Employee subgroup grouping for Collective Agreement Provision (CAP)
2. Pay scale area
3. Pay scale type
4. Pay scale group
5. Pay scale level
For example, your company has branches in Mumbai, Delhi, Pune and Haldia. The city in which the branch is located, affects the compensation of the employees to a great extent. Here, you can assign the different cities to Pay scale area. Pay scale area then becomes one of the pay parameters to define Pay Scale Grouping for Allowances.
You should determine those factors, which affect the compensation of the majority of the employees. Only these important factors should be assigned to the pay parameters mentioned above. These pay parameters include, the location, the department, the grade of the employee. You should not assign those parameters to Pay Scale Grouping for Allowances that affect the compensation of selected employees only. For example, years of experience in the organization can be taken care of by other compensation factors and it may not be necessary to assign it to a pay parameter. The other parameters, which affect the pay of selected employees, can be configured through the Feature to determine the eligibility for RAPs (40ECS). Some of these parameters are, number of dependents, marital status, years of experience in the organization.
You can use all or any combination of any of the above pay parameters in determining the Pay Scale Grouping for Allowances for your company. You can leave one or more pay parameters, out of the five mentioned above, unassigned. This is helpful if there is a change in your organization and there is another important factor on which the compensation of your employees depends. In this case, you can assign that factor to the unassigned parameter.
For more than one combination of pay parameters, you can have a single Pay Scale Grouping for Allowances. But for a single combination of pay parameters, you can have only one Pay Scale Grouping for Allowances. For example, an employee, of a Managerial grade, is located in Mumbai and works in the Marketing department. He belongs to the Pay Scale Grouping for Allowances, MN01. This employee can belong to only one Pay Scale Grouping for Allowances. Pay Scale Grouping for Allowances, MN01, can have two combinations of employees - first, as mentioned above, second, an employee who is of a Managerial grade, is located in Delhi and works in the Marketing department. Both sets of employees can be eligible for the same compensation structure. This is because, employees in Mumbai and Delhi, with the rest of the pay parameters same, may be eligible for the same compensation structure. In this case, if the employee, who is of a Managerial grade, works in the Marketing department but is located in Pune, might belong to a different Pay Scale Grouping for Allowances.
Integration
When you hire an employee,
· You enter the Employee Group and Employee Subgroup in Organizational Assignment Infotype (0001). The employee automatically gets assigned to Employee subgroup grouping for Collective Agreement Provision (CAP). This is the result of the assignment of Employee subgroup grouping for Collective Agreement Provision (CAP) for each combination of Employee Group and Employee subgroup in the IMG under Personnel Management ® Personnel Administration ® Payroll Data ® Basic Pay ® Define EE Subgroup Grouping for PCR and Coll.Agrmt.Prov.
· You enter the Pay scale area, Pay scale type, Pay scale group, Pay scale level in the Basic Pay Infotype (0008).
For an employee, when you enter the Employee Group and Employee Subgroup in Organizational Assignment Infotype (0001), and Pay scale area, Pay scale type, Pay scale group, Pay scale level in the Basic Pay Infotype (0008), the employee automatically gets assigned to a Pay Scale Grouping for Allowances. This is a result of the assignment of the pay parameters to the Pay Scale Grouping for Allowances in the IMG under Payroll India: Pay Scale Groupings ® Assign Pay Scale Groupings for Allowances. This is the first implementation to be done in IMG for Payroll India.
Pay Scale Grouping for Allowances is not recorded in any of the infotypes. An employee cannot be directly assigned to a Pay Scale Grouping for Allowances. He/she can be assigned to a Pay Scale Grouping for Allowances only when he/she gets assigned to the five pay parameters mentioned above. But, you can check the output of the ININI function from the payroll log for information on Pay Scale Grouping for Allowances.
Features
Pay Scale Grouping for Allowances affects the following objects:
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1. Default Wage Types
You can maintain the default wage types for an employee through the IMG under Payroll India: Reimbursements, Allowances and Perks ® Maintain Default Wage Types for Basic Pay. When an employee gets assigned to a Pay Scale Grouping for Allowances, the default wage types maintained for that Pay Scale Grouping for Allowances can get defaulted into the Basic Pay Infotype (0008) for that employee.
2. Recur. Payments/Deductions Infotype (0014) and Additional Payments Infotype (0015)
If you enter an Indirect Evaluation wage type, using the Indirect Evaluation Module INVAL, in the Recur. Payments/Deductions Infotype (0014) or the Additional Payments Infotype (0015), the wage type has to be defined for the Pay Scale Grouping for Allowances to which this employee belongs. To define this, go to the IMG under Payroll India: Pay Scale Groupings ® Calculate Eligibility for RAPs.
3. Basic salary and increments
4. Dearness Allowance
5. Housing and Car & Conveyance
Defaulting and Indirect Evaluation for the Housing (HRA / CLA / COA) and Conveyance wage types happen only when you populate and save the respective infotypes – Housing (HRA / CLA / COA) Infotype (0581) and Car & Conveyance Infotype (0583). The wage types are defaulted depending on the Pay Scale Grouping for Allowances to which the employee belongs.
6. Reimbursements, Allowances and Perks
8. Gratuity
11. Rounding off Recovery
12. One day salary deduction
13. Provident Fund
See also:
Pay Scale Grouping for Allowances Definition
