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  Salary Packaging ( India )

Use

This component describes Salary Packaging (Flexible Benefit Package) in India .

An employee’s salary typically consists of fixed salary components such as basic pay and employee definable salary components. Employees have the option of assigning their variable salary amount across the available salary components.

For example, the employee definable salary component in a company includes House Rent Allowance (HRA), Conveyance Allowance (CA), Medical Reimbursement , Leave Travel Allowance (LTA) and Children Education Allowance ( CEA) .

Employee can choose the salary component and amount for these salary components, based on configuration. For example, of the total variable salary, the employee can choose to allocate a higher amount towards HRA and LTA, and choose not to allocate any amount towards Children Education Allowance .

Integration

You use the Claims functionality to process claims submitted by employees, against a specific reimbursement, for example Leave Travel Allowance . During Claims processing, the system checks Individual Reimbursements (0589) infotype to determine an employee’s eligibility towards a particular reimbursement type. Salary Packaging functionality, during processing updates Individual reimbursement (0589) infotype.

Note Note

In case there is no record for the employee in Individual Reimbursements (0589), the system determines the eligibility based on his or her Allowance Grouping (ALGRP.

End of the note.

For more information, see Claims and Individual Reimbursements (0589) infotype.

Features

This section describes the features relevant to Salary Packaging in India :

  • Master Data

    Infotypes relevant for Salary Package include the following:

    • Basic Pay (0008) infotype and Recurring Payments/Deductions (0014) infotype

      These infotypes store the monthly amounts of an employee’s salary components. You maintain the annual amounts of the salary components on the salary packaging screen. The system divides the total package amount by the total number of periods and updates the value in these infotypes.

    • Individual Reimbursements (0589) infotype

      This infotype stores the employees’ annual reimbursement eligibility for a salary component.

      The system reads the annual reimbursable amount from the Salary Packaging screen and stores the amount in the Individual Reimbursements (0589) infotype.

      By default, an employee’s Pay Scale Grouping For Allowance determines the eligibility towards a salary component. However, the eligibility maintained in this infotype overrides that determined through Pay Scale Grouping For Allowance .

  • Salary Computation

    • Salary Packaging functionality computes amount for given salary component on annual basis. While updating the selected salary components and amounts in the master data, the system updates the amount as monthly payment/deduction amount or annual eligibility amount based on the infotype in use.

      • If you use Basic Pay (0008) infotype or Recurring Payments/Deductions (0014) infotype for the salary component, the system divides the amounts maintained on the Salary Packaging screen by the total number of periods (12 for monthly payroll) and updates the infotype.

      • If you use Individual Reimbursements (0589) infotype for the salary component, the system updates the whole amount maintained on the Salary Packaging as eligibility in the Individual Reimbursements (0589) infotype. For this eligibility amount, you can configure validity duration for the given reimbursement type in claims functionality (V_T7I9AA).

        In case of employees who join mid period, proration of eligibility amounts, takes place during the processing of Claims and not through Salary Packaging.

  • Indirect Valuation

    Salary Packaging partially supports this feature. Indirect valuations are possible if you select the INVAL indicator on the Salary Packaging screen.

  • Payroll Splits

    When you update Basic Pay (0008) infotype using Salary Packaging functionality on a particular date, and if there are any subsequent splits in the infotype, the system does not process these splits. In such a case, the system displays a screen containing information about subsequent splits so that you can update the same manually.

  • Customizing

    For more information about configuring Salary Package for India, see Customizing for Salary Packaging under Start of the navigation path Payroll India Next navigation step Flexible Benefit Package End of the navigation path .