Salary Packaging 

Use

Salary packaging allows you to accurately forecast the impact that various salary components have on an employee's gross and net income. By accurately projecting an employee's total package, employers can streamline remuneration to an employee's individual requirements.

Integration

Salary packaging is integrated into the following SAP components:

·         Personnel Administration

·         Payroll South Africa

·         Payroll Australia

·         Payroll India

Prerequisites

The following conditions must be fulfilled before setting up salary packaging parameters for an employee.

·         An employee must be assigned the following infotypes:

·         Actions (0000)

·         Organizational Assignment (0001)

·         Personal Data (0002)

·         Addresses (0006)

·         Planned Working Time (0007)

·         Basic Pay (0008)

·         Bank Details (0009)

·         Taxes  SA (0149) (valid only for South Africa)

·         Social Insurance  SA (0150) (valid only for South Africa)

·         Superannuation (0220) (valid only for Australia)

·         If an employee receives a total package, they must also be assigned the model wage type /TPA with the total package amount. Note: This amount is set to a per period amount and not an annual amount.

·         Your company's salary components must be set up in Customizing. To do so, see in the IMG: Personnel Administration -> Payroll Data -> Salary Packaging -> Salary Components -> Define Salary Components. For additional Customizing information, see Salary Package Customizing.

To ensure that system parameters are set up for Salary Packaging, it is recommended to review all the steps in the IMG under Salary Packaging before creating individual salary packages for your employees.

Features

·         Based on eligibility criteria, employees are only offered those salary components for which they are eligible.

·         An employee's total package can be calculated as follows:

·         As a total package where the sum of all the employee's salary components must add up to the total package amount.

·         An employee receives a basic salary. The relevant salary components are then added to the basic salary. The sum of the employee's basic salary and the salary components equal the employee's total package.

In both cases, you can display the total cost to the company.

·         For comparison purposes, you can view the values of an employee's old package against the values of the new package.

·         You can run a payroll simulation. By reviewing the employee's payslip, you can check the employee's simulated net pay.

·         Upon saving an employee's salary package, all the relevant infotypes will automatically be updated (provided that the salary package is accepted by the system).

Activities

In the Salary Packaging IMG, perform the relevant customizing steps: see Salary Package Customizing.

To create an employee's salary package, see Modeling a Salary Package.

See also

·        Sample Employee Salary Package (South Africa)

·        Sample Employee Salary Package (Australia)

·        Salary Packaging - India