Sample Employee Salary Package (South Africa) 

Purpose

This example serves to illustrate the various ways you can use the salary packaging functionality.

Based on Salary Package Customizing, the following salary components were created:

·         Total package *

·         Bonus

·         Pension fund *

·         Car Allowance

·         Company car

·         Retirement annuity *

·         Entertainment Allowance

·         Basic Salary *

·         Total cost *

Process Flow

The following example is the process flow of how the South African employee John Khumalo, of the Cape to Cairo trailer company, arrives at his optimal salary package.

By following the instructions in Modeling a Salary Package John's salary package contains the salary components listed above with * (as he previously had that information stored in his infotypes before creating his salary package). His salary package is as follows:

Salary Component                                                                   New Amount

·         Total package                                                                            R 240,000

·         Pension fund                                                                              R   16,800

·         Retirement annuity                                                                      R   24,000            

·         Basic Salary                                                                                R 199,200

·         Total cost                                                                                    R 240,000

The Total package amount is based on the amount entered in the model wage type /TPA in the infotype Basic Pay (0008).

Based on his organizational assignment and pay grade, John is eligible for other salary components (as indicated in the component list (left side of his Salary Packaging screen transaction P16B_ADMIN). He would therefore like to see what his salary package would look like with an entertainment allowance.

By using the right arrow, the salary component Entertainment allowance moves into his package. His salary package is therefore:

Salary Component                                                                   New Amount

·         Total package                                                                            R 240,000

·         Pension fund                                                                              R   16,800

·         Retirement annuity                                                                      R   24,000            

·         Entertainment allowance                                                             R      1,000

·         Basic Salary                                                                               R  198,200

·         Total cost                                                                                   R  240,000

Notice that the salary component Basic salary changed in order to accommodate the salary component Entertainment allowance.

If the salary component Total package is applicable for an employee, the employee must also have at least one salary component in their package with the nature of the salary component as Remainder. The reason for this is that the employee's Total package is a fixed amount. The salary component marked as Remainder (which is setup in the details of table V_T5W7A) will fluctuate according to other salary component added or subtracted, to ensure that the Total package amount remains the same.

John now decides that he no longer wants an entertainment allowance, but a car allowance. With the arrows again, he takes out the salary component Entertainment allowance and inserts the salary component Car allowance. In the Edit Area, he selects the relevant car information.

His salary package is now as follows:

Salary Component                                                                   New Amount

·         Total package                                                                          R   240,000

·         Pension fund                                                                            R     16,800

·         Retirement annuity                                                                    R     24,000                        

·         Car allowance                                                                           R       5,000

·         Basic Salary                                                                              R   194,200

·         Total cost                                                                                  R   240,000

Result

Both John and CCT are in agreement with the above salary package. The salary package is then saved by choosing Update.

Upon saving the salary package, all the infotypes in the salary package were automatically updated by the SAP System.