Compensation Package Offer (0706) 

Definition

In this infotype, you store one or more compensation package offers to cover the global employee's major expenses from expatriation to repatriation. For confidentiality reasons, a compensation package offer always consists of a pair of home and host subtypes, so that none of the involved parties is able to view the calculation of the other part, unless they are authorized to do so.

Use

This infotype enables you to define the components of the compensation package offer, which consist of compensation package items (CPIs) referring to gross and net salary or net spendable in host, as well as to payments or deductions, such as social insurance contributions and taxes, relocation, housing and schooling allowances.

Note

CPIs are exclusively used for calculation purposes. You only need to convert (that is, map to the corresponding wage types) those CPIs required for payroll upon transfer of the employee to the host country.

Structure

The infotype is split into two sections described below:

·         Currency and COLI Details

·         Compensation Package Details

Currency and COLI Details

In this section, you maintain:

·         The exchange rate
You can change the exchange rate used for the compensation package items, in which case the CPI amounts are updated accordingly. This rate is used for Home – Host (or vice versa) CPI calculations. For any other calculations, the current exchange date is used to determine the rate from Currency Exchange Rates (TCURR).

·         The exchange date
You can also change the exchange date, in which case, the value for the exchange rate on the date you have specified is retrieved from the currency table (TCURR).

·         The Cost of living index
You can change the COLI factor that applies to the global assignment, in which case the amounts of the affected CPI amounts are updated accordingly.

·         The Cost of living index date
You can also change the COLI date. The value is also retrieved from Customizing (For more information, see the IMG activity Define COLI Providers).

·         In addition, the activation date is displayed. The activation date is set by means of personnel action Host Activation (82) or Home Activation (83) and cannot be set manually. It specifies the key date for conversion, provided that the currency fluctuation protection has been activated. This is also the start date for the pay infotypes (0008 and 0014 and 0015).

Note

If you have created more than one compensation package offer for the same global employee on the same day, the most recent one is preceeded by a flag icon.

Compensation Package Offer

In this section, you can:

·         Create a new CPI: the value from Customizing is retrieved and the status set to Inserted.

·         Change an existing CPI: the value is automatically recalculated, as well as the dependent CPIs, and the status set to Changed.

·         Create and change a new CPI afterwards: the status set to Inserted and changed.

·         Delete an existing CPI: the status set to Deleted. However, the CPI record you have selected for deletion is marked as such but is still displayed in the list.

·         Undo any deletion and changes by means of the corresponding buttons.

Note

The payroll icon informs you that the compensation package items are transferred to payroll accounting upon activation.

Subtypes

For technical reasons only, this infotype is split into the following subtypes:

·        Home Country

·        Host Country

Integration

You must have maintained the following infotypes by means of the relevant personnel action:

·         Global Assignment Details (0710)

·         Global Assignment Status (0715)

Implementation Considerations

As the requirements vary from one company to another, the customization of compensation package items is extremely flexible. Nevertheless, we strongly recommend you to plan this phase very carefully.

For more information, see the IMG activities under the section Compensation Package.

Example

A compensation package for a Middle East assignment could look like this:

·         Relocation allowance

·         Base salary (tax-free)

·         Expatriate premium

·         Housing allowance

·         Education allowance

·         Location Allowance (if the global employee is transferred to a location that is considered as a remote location by the employer)

·         Annual home leave (paid holiday to return to your home country, usually on an annual basis and with eligible dependants)

·         Repatriation Allowance