Arrears Processing for Deductions 

Use

Arrears processing refers to the Voluntary Deductions that are deducted from the net remuneration. You enter these voluntary deductions using deduction wage types in the Recurring Payments/Deductions (0014) and Additional Payments (0015) infotypes, and in country specific infotypes for employer benefits. The system compares the deduction amount with the remaining net amount and, if possible, makes the deduction. When making this comparison the system takes a calculated country-specific minimum net amount into account.

Arrears processing is responsible for determining how payroll is performed if the deductions exceed the net remuneration.

Your employee takes part in a savings plan which means that a fixed amount is withheld from the net remuneration in each payroll period.

Moreover, regular amounts are deducted from the net remuneration and are paid to different institutions or towards company insurance.

If the sum of all the deductions is greater than the net amount , then all the deductions that were entered in the master data cannot be made during the payroll process.

Unpaid absences, for example, can lead to unexpectedly low net remuneration. If all deductions are taken in full, the difference between total net remuneration and the sum of all deductions becomes an outstanding debt owed to the employee.

Integration

You make the settings for arrears processing in Customizing for Payroll under Deductions ® Arrears and Priorities.

Features

Arrears processing is controlled using deduction wage type characteristics. You assign the following characteristics to deduction wage types for arrears processing:

The priority specifies the sequence in which the deduction wage types are processed. If deduction wage types exist with the same priority in payroll, then the system sorts them according to name.

If you use the Garnishment component, you should assign the garnishment wage type with the highest priority.

You must also specify in Customizing the way in which deduction wage types should be processed if the net amount does not provide sufficient cover. The possibilities available for arrears characteristics are described in detail in Customizing for Payroll under Deductions ® Arrears and Priorities® Define Priority for Deduction