If an employee did not work for the whole payroll period, then a partial remuneration is calculated during the payroll run. In this way only results for the current period are considered. Factoring is used in the following cases:

To determine an employee’s exact remuneration, the remuneration amount is multiplied by a partial period factor. The partial period factor can be calculated using different methods:

• Payment method
• Deduction method
• Hybrid of payment and deduction methods
• PWS method
• All or nothing method

You find guidelines on which method to select in the collective agreement, the company agreement and in the documentation on the individual methods. The question of which method to use is extremely important, particularly if payroll is run for monthly periods.

The standard system contains a few examples for factoring rules that are needed to determine the partial period factor. You can either use these rules as they are, or adapt them in Customizing for Payroll under Factoring to meet your company requirements. Using Create Wage Types for Cost Accounting, you assign the wage types to different wage types for cost accounting.

The following infotypes are evaluated for factoring in payroll:

• Actions infotype(0000)
• Organizational Assignment infotype(0001)
• Planned Working Time infotype (0007)
• Basic Pay infotype(0008)
• Recurring Payments and Deductions infotype (0014)
• Additional Payments infotype (0015)
• Absences infotype (2001)
• Substitutions infotype (2003)