Deduction Method (SAP Library

Deduction Method

Definition

The method used to calculate partial period factors.

Use

If the deduction method is employed, a prorata amount is deducted from employee remuneration for the period of his or her unpaid absence. The constant for the flat-rate period work time is used as the divisor.

If the payroll is run for monthly periods, the general divisor determines that each calculation unit has the same value, irrespective of whether the period is a short or long month.

The deduction method is suitable to use in the following situations:

The employee has few unpaid absences.

The actual length of the period is not different from the general length of the period (for example, weekly payment).

The deduction method is not suitable to use in the following situations:

Payroll is run for an employee on a monthly basis (monthly or half-monthly) and the employee has only a few unpaid absences.
In long months (e.g. July) a large number of absences could result in negative remuneration, i.e. money would be claimed from the employee.
In short months (e.g. February) the employee also receives remuneration if he was absent for the whole month.
Partial payments must be calculated for exact periods.

The employee would receive an amount that is different from the remuneration amount for the period because the number of hours or days does not correspond to the average.

Structure

The partial period factor is calculated as follows:

Factor = (general period work time - absence) / general period work time

You can use the average values typical for your particular country, industry, or company as general period working time.