Define Wage Types for Benefit Plans (SAP Library

Define Wage Types for Benefit Plans

In this step you determine the wage types relevant for the processing of your benefits plans in payroll. These wage types can be divided into two categories:

Wage types that are used to store final amounts only.

Wage types and compensation models that determine earnings and working time as the basis for further calculations in payroll.

For more information about how the required wage types relate to the plan set-up in the different plan categories, see the following documentation:

In this step you also indicate whether costs or contributions are allowed for bonus payments and, for plans with costs and for flexible spending accounts, define whether predeductions are made for employees leaving the organization.

Requirements

The Benefits section of the Enterprise IMG has been completed. It is not possible to assign benefits-specific wage types to plans unless the plans plans have been created and fully customized.

The required wage types have been defined in the Payroll IMG.

Activities

1. Enter the validity period for the wage type assignments.

2. Indicate whether you want to allow costs/contributions from bonus payments.

3. Indicate whether you want to prededuct amounts due from employees leaving the company (if prededuction is supported for the plan category).

4. Assign the required wage types to the plan.

The wage types that you need to assign to plans depend on the definition of the plans themselves. The system automatically determines the wage types that are required and displays the appropriate fields for you to fill.

a) For plans with contributions defined as dependent on employee salary, enter a technical wage type to determine salary for regular, and, if necessary, bonus payroll runs. Alternatively, you can specify a compensation model for earnings to do this.

b) If the plan is a retirement plan, enter a compensation model to determine pensionable earnings.

c) If the plan is a retirement plan and you want length of service to be calculated using the hours-counting method (as defined in the Benefits IMG in the section Plans -> Savings Plans ->

Retirement Plan Service), specify a compensation model for hours to determine pensionable hours.

You may want to credit a fixed number of hours service regardless of the number of hours worked by an employee. In this case, select the appropriate option and enter the number of deemed hours and the period to which they relate.

If an employee works at least one hour within the period, the specified number of hours are automatically used as the basis for length of service calculation.

You may want to base the length of service on the employee's planned working time. In this case, select Acc.to plnd wrk time.

If an employee works at least one hour within the period, the number of planned working hours are automatically used as the basis for length of service calculation.

5. If you have assigned a compensation model to determine pensionable earnings or working hours, specify a compensation wage type in which these values can be stored.