Long Term Reimbursements
Purpose
Long term reimbursements are benefits provided to the employees over a fixed period of years. The duration of the benefit generally varies between three to five years. In the SAP system, you can categorize Long Term Reimbursements into the following:
· Hard Furnishing Scheme
This is a benefit provided to employees for the purpose of acquiring movable capital items like furniture, fridge, washing machine, television, and computer.
· Soft Furnishing Schemeor Other Reimbursements
This is a benefit provided to employees for the purpose of acquiring consumer capital items like carpets and curtains.
· Car Maintenance Scheme
This is a benefit provided to employees for the purpose of maintenance of their car over a period of time.
Features
· Long Term Reimbursements infotype (0590) – You can maintain the Long Term Reimbursement claimed by the employees in this infotype and under one of the following subtypes:
¡ Subtype SHFS – For maintaining details on the hard furnishing schemes
¡ Subtype SSFS - For maintaining details on the soft furnishing schemes
¡ Subtype SCAR – For maintaining details on the car maintenance schemes
For more information, refer to Long Term Reimbursements infotype (0590).
· Duration – Companies assign a fixed period to long term reimbursements. This period is generally for three years or five years. You can configure the duration of a Long Term Reimbursement using the Determine block of years for Long term reimbursements feature (40LTR). To do so, go to the IMG under Payroll India ® Long Term Reimbursements ® Maintain block of years for Long Term Reimbursements.
The duration of a long term reimbursements can be for a:
¡ Fixed block of years, and having a fixed end date – The begin date would be from the date on which the employee acquires the asset. For a particular reimbursement however, the End Date is already fixed in the system.
Currently, this type of duration is applicable on Hard Furnishing schemes. You define the number of years in a block, and fixed End date of a block using the Determine block of years for Long term reimbursements feature (40LTR).
¡ Variable block of years – Here you specify the begin date of a soft furnishing scheme, and the duration will be for a fixed block of years, starting from this begin date. This type of duration is applicable on Soft Furnishing schemes. The Determine block of years for Long term reimbursements feature (40LTR) returns the value for the duration of the soft furnishing scheme.
¡ Fixed block of years divided into smaller blocks – The duration of the reimbursement is for a fixed block, and you in turn divide the block into smaller sub blocks or smaller validity periods. For every validity period, you define the eligible amount and the number of times that the employee can claim the long term reimbursement. This type of duration is applicable on the Car Maintenance scheme.
For example, an employee is eligible to a Car Maintenance Allowance of Rs.15,000 for a block of 3 years. The employee can claim a maximum of Rs.5,000 every year. Within a year, the employee can submit a claim only twice.
The Determine block of years for Long term reimbursements feature (40LTR) returns the value for the validity period of the main block. The Feature to determine the eligibility for RAPs feature (40ECS) returns the Begin Date and End Date for the sub blocks. It also returns the eligible amount and the number of times than an employee can make a claim in a sub block.
For every sub block, you must configure the Begin Date and End Date, the eligible amount, and the limit on the number of times an employee can make a claim. To do so, you must create your own program, and then specify the name of this program (against the wage type for Car Maintenance Scheme) in the Feature to determine the eligibility for RAPs feature (40ECS).
If you have any other schemes with a disbursement type distributed over a block on ‚n‘ validity periods, you can create them using your own program and specifying the name of the program in the Feature to determine the eligibility for RAPs feature (40ECS). You can create your own subtype (Z***) through the table view Subtype Characteristics (V_T591A).
· Eligibility – Pay Scale Grouping for Allowances determines the eligibility of an employee towards a particular type of long term reimbursement. An employee may become eligible for a particular long term reimbursement at the time of joining, or with a promotion. In the standard SAP system, the eligible amount is indicated by the HFS eligibility wage type (M213). The eligibility for this wage type is handled through Indirect Evaluation.
In the case of a Hard Furnishing Scheme, if an employee joins your company after the start of a reimbursement block period, the system will prorate the eligible amount for the remaining block period. If the employee however, becomes eligible for a particular reimbursement because of a promotion, the system does not prorate the amount for the remaining period. The employee is eligible to the entire amount.
· Perquisite – There is a perquisite value attached to the various long term reimbursements that you offer to an employee, and the Calculate Hard Furnishing Perk Value payroll function (INHFS) calculates applicable tax on this perquisite value.
¡ Hard Furnishing Scheme – The authorities specify a fixed percentage as the perquisite value applicable on the assets availed by the employee during a financial year. This value is stored in the Calculate Hard Furnishing Perk Value constant (HFPRC) of the table view Payroll Constants (V_T511K).
¡ Soft Furnishing Scheme – The system calculates perquisite value for the assets that an employee availed in the current financial year based on the perquisite percentage that you maintain in the Long Term Reimbursements infotype (590), subtype SSFS.
¡ Car Maintenance Scheme – There is no perquisite value associated with the Car Maintenance Scheme, or other similar maintenance schemes that you create.
See also:
· Long Term Reimbursements infotype (590)
· Pay Scale Groupings for Allowances