Human Resources. R/3 System Payroll South Africa

Transcription

1 Human Resources R/3 System Payroll South Africa

2 SAP AG Neurottstraße Walldorf Germany

3 Copyright 1998 SAP AG. All rights reserved. No part of this brochure may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft, WINDOWS, NT, EXCEL and SQL-Server are registered trademarks of Microsoft Corporation. IBM, DB2, OS/2, DB2/6000, Parallel Sysplex, MVS/ESA, RS/6000, AIX, S/390, AS/400, OS/390, und OS/400 are registered trademarks of IBM Corporation. OSF/Motif is a registered trademark of Open Software Foundation. ORACLE is a registered trademark of ORACLE Corporation, California, USA. INFORMIX -OnLine for SAP is a registered trademark of Informix Software Incorporated. UNIX and X/Open are registered trademarks of SCO Santa Cruz Operation. ADABAS is a registered trademark of Software AG. SAP, R/2, R/3, RIVA, ABAP, SAPoffice, SAPmail, SAPaccess, SAP-EDI, SAP ArchiveLink, SAP EarlyWatch, SAP Business Workflow, SAP Retail, ALE/WEB, SAPTRONIC, SAP Scope are registered trademarks of SAP AG. All rights reserved. Payroll South Africa March 1999

4 Contents Payroll South Africa SAP Payroll South Africa... 1 Don t Get Left Behind... 2 SAP Payroll: Standard Functions... 2 Automatic Retroactive Calculations... 2 Year Balances and Totals Capability... 3 Priorities and Arrears... 3 Committed to the South African Market... 4 Retroactive Accounting for a Closed Tax Year... 4 Taxes... 4 IRP Legislative Changes... 5 Check Digit Verification... 5 Mandatory Employee Letters... 5 Standard Payroll Reports... 5 Employee Termination... 5 Social Insurance... 6 External Insurance... 6 How Can SAP Payroll Perform Such Functions So Effortlessly?... 7 Personnel Administration... 7 Time Management... 7 Valuate Time Data... 7 Payroll Data... 7 Dynamic Actions... 8 The Heart of SAP Payroll... 8 Salary Administration... 8 Payroll Run... 9 Deductions... 9 Factoring... 9 Checking Payroll... 9 III

5 Data correction Exiting Payroll Data Security and Data Protection Secure Payroll Administration Online and Background Processing Regular Subsequent Activities in Payroll - an Integrated Solution Pay Slip Bank Transfers Posting to Accounting Additional Payroll Scenarios Simulating a Payroll Run Parallel Payroll Runs Special Interest Group (SIG) - Human Resources Payroll Continued Maintenance and Support Index...I You can find this and other current literature on our home page in the media centers for each subject at:

6 SAP Payroll South Africa In today s dynamic business world, you need a payroll system that caters to your complex payroll needs. Your payroll system must, for example, be able to perform retroactive calculations, always keep you up-to-date on legislative requirements, and offer you South African-specific functions. Because payroll is not a stand-alone entity within your organisation, your payroll system must be integrated with other departments. SAP offers a standard software system that meets all of these challenges and more. Tough Demands The SAP solution is called SAP Payroll South Africa a system that is comprehensive, yet flexible, one that can be totally integrated with other R/3 components. We provide the solutions to the payroll challenges you face today, while equipping you with leading-edge technology and support to carry you worry free into the future. The power of SAP software lies in its flexibility. When setting-up your R/3 System, you can easily copy model entries. For help with the implementation and maintenance of SAP Payroll, simply follow the straightforward instructions in the Implementation Guide (IMG). Solid Solutions Flexibility 1

7 Don t Get Left Behind The Logical Choice We invite you to learn more about how SAP Payroll South Africa can work for you. SAP, a world leader in client/server software, offers both large and small companies in South Africa a user-friendly payroll solution. Because SAP Payroll is table driven, you can easily configure it for your organisation. The system processes high volumes of data, while offering you an extensive audit trail. If you have subsidiaries, you can also run numerous companies all from one system. The gross calculation portion of SAP Payroll South Africa is based upon standard SAP Payroll functions used world-wide. The net calculation portion has been specifically developed for South Africa and takes into account all the factors necessary for you to run payroll in South Africa. SAP Payroll is an established and stable software solution for the South African market. SAP Payroll: Standard Functions During a payroll run, the system automatically determines the correct values for your employees remuneration, tax payments, Social Insurance contributions, posting to accounting, plus much more. All essential core payroll areas are integrated in SAP Payroll, including: Factoring Evaluation of time data Loans Collective agreements Automatic Retroactive Calculations SAP Payroll automatically handles changes in personnel records for previous pay periods. The system repeats the payroll for all periods affected during the subsequent payroll run. At the end of the period in which this retroactive calculation has taken place, the employee receives a separate pay slip. The system calculates the appropriate payment amount, which is paid at the end of the period. The system automatically calculates differences in tax, Social Insurance contributions, and other deduction amounts arising from the retroactive calculation. The system takes the previous limits into account during the retroactive calculation, for example, if the UIF limits have changed. 2

8 Retroactive calculation with the system is not restricted to one-time corrections of an employee s personnel record. If changes occur at a later date, you can repeat retroactive calculations. You can also set the earliest retroactive calculation date for individual employees or for groups of employees. Because the R/3 System is an integrated system, personnel records remain consistent with payroll results. Year 2000 Since its inception, the R/3 System has used four-digit dates, so it can handle dates in the twenty-first century. You can therefore bring your business effortlessly into the next millennium without making any adjustments to the software. Y2K Solution Balances and Totals Capability You can offer your employees the flexibility of paying back amounts owed to your organisation in instalments. The system automatically deducts a given sum from an employee s pay, while keeping a running total of any amount still owed. This is an extremely convenient method of repayment for your employees who, for example, must purchase equipment in order to perform their job. Priorities and Arrears In such cases where an employee s net pay does not sufficiently cover all of their deductions for a specific payroll period, you can use the priorities and arrears function to: Prioritise employee deductions per pay period in the system for Additional Payment and Recurring Payments and Deductions. Set deductions to be paid in full despite insufficient employee funding. The amount not paid by the employee is considered a deduction to be paid to the employer. The arrears function will continually perform the above process in each payroll period until all the employee s deductions are paid off. 3

9 Committed to the South African Market In addition to standard payroll functions, your organisation must handle payroll requirements specific to South Africa. To cater to these needs, SAP continues to develop special South African functions. The following are just some of the many highlights of SAP Payroll South Africa. Retroactive Accounting for a Closed Tax Year Without changing an employee s tax details, you can retroactively calculate taxes and tax exemptions from a closed tax year. The amounts retroactively calculated (from the closed tax year) are brought forward into the current period where adjustments are made. Taxes State-Of-The-Art Calculations Electronic Certificates SAP Payroll South Africa calculates employee withholding tax based on regulations set by the Receiver of Revenue. The system calculates SITE and PAYE for your employees using one of four tax procedures, including annual equivalent calculations. SAP Payroll also takes into account special tax implications while calculating such benefits as a company car and housing allowance. IRP5 SAP Payroll provides you with the full capability to process IRP5s for all of your employees. To ensure you comply with the new Receiver of Revenue format requirements, SAP offers you an electronic IPR5 reporting solution. In-house, you are free to choose your presentation medium, including PC downloading and printouts. It may be necessary for you to print IRP5s, not only at tax year-end, but also throughout the year. In such cases, the system keeps track of these employees to ensure that no duplicate IRP5s are generated. 4

10 Legislative Changes To ensure you comply with current legislation, SAP monitors legislative developments set by the government and the Receiver of Revenue. We will keep you informed of all relevant payroll changes and update SAP Payroll South Africa procedures accordingly. Leave the Legal Requirements to SAP Check Digit Verification The Check Digit Verification (CDV) function allows you to check whether your employees bank information is correct from the source. Running the CDV check significantly reduces the number of incorrect details, which dramatically decreases the possibility of return payments. Easy as Mandatory Employee Letters Sometimes, timing is everything, and calculating additional tax rebates is one of those cases. If employees do not submit an age letter before the start of the tax year in which they turn 65, they do not qualify for a tax rebate. With SAP Payroll, you can keep track of when employees must submit this letter. Stay in Compliance Standard Payroll Reports The query-reporting tool allows you to review reports online, which can then be printed or downloaded. In addition to the standard reports, the system also offers you South African specific reports, including: Deduction Schedules IRP5/IT3A Reports Tax Register Compensation for Occupational Injuries and Diseases Act (COIDA) Employee Termination To assist you with administrative work when terminating employees, the system: Automatically calculates taxes and year-end figures for employees who are terminated mid-year Automatically calculates lump sum payments for retirement, retrenchment, and long service based on tax directives issued by the Receiver of Revenue 5

11 Social Insurance Comprehensively Calculate Deductions With SAP Payroll, you can store, process, and calculate employer and employee contributions for the following types of Social Insurance: Medical aid SAP Payroll calculates medical aid contributions in great detail, with the following criteria taken into account: - Medical aid company - Medical aid scheme - Employee s age (when applicable) - Employee s salary - Dependent coverage The system also enables you to process special contributions, medical savings accounts, and gap insurance. Pension fund SAP Payroll calculates pension fund contributions based on the company and fund selected by the employee. The system also automatically calculates pension fund tax exemptions. Unemployment Insurance Fund SAP Payroll bases Unemployment Insurance Fund (UIF) contributions based upon sophisticated system calculations determined by the UIF threshold amount and an employee s salary. External Insurance With SAP Payroll, you can process contributions for the following types of external insurance: Provident funds Group insurance schemes Life insurance schemes Retirement annuity funds Annuities Pension arrears contributions Savings plans Union memberships Membership dues The system automatically recalculates any special tax implications resulting from external insurance. To accommodate additional external contributions, simply adjust your SAP System accordingly. 6

12 How Can SAP Payroll Perform Such Functions So Effortlessly? Personnel Administration The answer lies in the design! With uniform data storage, you can conveniently access employee records used in the SAP Personnel Administration component from within Payroll. You therefore only need to enter payroll-relevant data once. Data is always current in the system and is continuously used for payroll calculations. One Point of Data Entry Time Management The SAP Time Management component is used to run payroll for employees remunerated on an hourly basis or for administering flexible working hours. Valuate Time Data During a payroll run, the SAP Payroll component calculates remuneration for hourly wage earners, along with overtime and benefits subject to bonuses. You can also process various types of absences, including leave, sick leave, and maternity leave. You may also want to install a time recording device or run time accounts for employees. Payroll Data When you hire an employee, the SAP Personnel Administration component stores the employee s personnel record, including such information as: Personal information Addresses Bank information Furthermore, you also store all relevant employee data for: Organisational assignment Personnel administration Remuneration Comprehensive Data Storage 7

13 For example, you can store information on salary and bonuses based on an employee s work schedule. Your personnel department must continually maintain employee data, for example, if an employee: Receives a pay increase Gets a once-off bonus Takes leave Attends an external training course Based on an employee s personnel record and time data, the system automatically evaluates such instances during a payroll run, without the personnel department having to re-enter the data. Dynamic Actions Speedy Data Entry SAP Payroll has dynamic actions that help you enter data. Dynamic actions logically take you step-by-step through all relevant screens necessary to perform an action. For example, a dynamic action takes you through the hiring process. Dynamic actions are also used when maintaining employee data. For example, if an employee s marital status changes from single to married, a dynamic action automatically brings you to the appropriate screen to maintain dependent information. You can also customise your own dynamic actions. The Heart of SAP Payroll SAP Payroll offers you an efficient and reliable payroll solution. Its innovative design and high-performance payroll functions minimise the time needed to prepare and execute regular payroll runs for your employees. Salary Administration SAP Payroll offers you many options to define the remuneration standards within your company. You can: Define pay scale systems for different groups of employees Assign a particular pay scale, pay scale group, and pay scale level to an employee Define an employee s basic pay and bonuses Maintain data for taxes and Social Insurance Specify which groups of employees receive a bonus Determine at what point an employee receives a pay increase or when an employee should move from one pay level to the next 8

14 Payroll Run The system performs payroll runs for an employee or a group of employees based upon which payroll area they are assigned. For example, you can define payroll areas in various ways, such that: Payroll runs are performed for many employees at the same time. Payroll runs have the same frequency. The earliest possible retroactive accounting dates are the same. Rerun payroll only for employees with errors and not the entire payroll run. Deductions During the payroll run, the system calculates: Payments Voluntary or statutory deductions Benefit deductions and garnishments The resulting payment amounts for each employee The amounts calculated for each employee are stored in payroll results. The system also handles deductions from gross remuneration and net remuneration, for example, for loans or voluntary insurance. In addition to regular deductions, you can also process once-off deductions. Factoring Under certain circumstances, you might need to reduce an employee s standard remuneration or calculate a percentage. For example, employees remuneration is reduced if they start working at your company, then leave your company, or take unpaid leave. Remuneration is also calculated proportionally if an employee: Changes departments Changes cost centres Receives a pay increase Receives a higher salary when working as a substitute for another employee during a payroll period In addition to accommodating all of these situations, the system also calculates sick pay and maternity leave. The standard system provides you with the most widely used calculation rules and processes, but you can define alternative calculation rules at any time. Checking Payroll The system ensures that the payroll results generated are complete. This allows administrators to gain an overview of completed payroll runs for any employee for whom they are responsible. This is important if an administrator wants to verify the accuracy of wage and salary payments or to explain the payroll process to an employee. A Comprehensive Process 9

15 After running payroll, you can check whether the system has detected any errors during the payroll run. If incorrect personnel records or time data have been entered for an employee, this employee will be automatically excluded from the payroll run, but included on a report for checking purposes. Various programs are available for checking the accuracy of payroll results. Errors are detected early so that you can be sure your company does not make incorrect payments. Data correction If errors are detected, the payroll administrator receives a list of employees for whom payroll could not be successfully run. Once the errors are corrected, the payroll administrator can re-run payroll for only those employees affected. Exiting Payroll Once a payroll run has been successfully performed without errors for all selected employees, you can exit SAP Payroll. This closes the payroll period in question. Personnel records and time data are then once again available for processing. The system automatically ensures that a payroll run is performed for the next payroll period, eliminating the possibility of duplicate payroll runs. Data Security and Data Protection Innovative Authorisation Checks The SAP authorisation concept allows you to set different levels of authorisation. This ensures that only the appropriate persons within your organisation can access certain data and change personnel records. You can also maintain personnel records and payroll in separate departments without affecting data security or data protection. Secure Payroll Administration SAP Payroll guarantees streamlined payroll processing. Lock mechanisms ensure that no relevant personnel or time data record can be changed during the payroll run. However, since the system administers these data records using validity periods, you can enter personnel records and time data to be used for future periods (while a payroll run is in progress). You can also view past and current data at any time. The integrated security mechanisms prevent the system from inadvertently remunerating an employee twice in one payroll period. It is only possible to repeat a payroll run if there is a change to personnel or time data records after the payroll period is closed. Under these conditions, retroactive accounting is triggered. Online and Background Processing You can select the individual steps involved in a regular payroll run online or in a batch format, and all subsequent activities online. This procedure is particularly recommended when installing and testing the system settings. It is also useful if you want to run payroll for individual employees. Regular payroll activities are usually processed in the background. 10

16 Regular Subsequent Activities in Payroll - an Integrated Solution You must carry out a number of activities after a regular payroll run to complete the payroll process. SAP Payroll naturally supports you in these activities. Additionally, with the highly integrated SAP R/3 System, you can transfer payroll results to other departments, including finance and controlling. Pay Slip SAP Payroll provides you with a standard pay slip form. By using the form editor, you can modify the pay slip as necessary. The pay slip is, in fact, highly configurable. You can print messages on the pay slip to an individual employee or to all employees. For example, you could congratulate an employee on a birthday or inform all employees of an annual outing. Bank Transfers The primary goal of payroll is, of course, to pay your employees. SAP Payroll allows you to pay your employees by bank transfer, cheque, or cash. Bank transfers are processed with a data exchange from your company s bank account to your employees bank accounts. Posting to Accounting If you install SAP Accounting components in addition to SAP Payroll, you can also transfer or assign the posting data to: The appropriate accounts in Financial Accounting The appropriate Controlling cost centres The Special Ledger Funds Management To ensure the confidentiality of employee salary and benefits information, the system only posts summarised data to Accounting. The authorised employees in the personnel department can, of course, access detailed information if necessary. In the event a correction must be made, the cumulative amounts from individual accounts can be traced back to the payroll results for an individual employee. You can therefore quickly respond to questions from the particular controlling cost centres. Integration 11

17 Additional Payroll Scenarios A core element of SAP Payroll is periodic payroll, such as monthly payroll runs. The system also supports additional bulk payroll scenarios, which if necessary, can be implemented. Simulating a Payroll Run You can simulate a payroll run for the current payroll period at any time. This feature is important if you want to check: Your company-specific settings The effect of changing an employee s personnel record or time data This allows you to quickly review tax calculations and an employee s payslip before processing a live run, without storing the payroll results. Parallel Payroll Runs If you have to run payroll for a large number of employees, processing time is an important consideration. With SAP Payroll you can minimise processing time in two ways; you can either run payroll in the background or perform parallel payroll runs. Background Processing Parallel Processing To run background processing, you determine in advance when the payroll run should be executed. Once these settings have been successfully tested, SAP recommends that you run your payrolls in the background. For extremely large numbers of employees, it may be most effective to execute parallel payroll runs. By running payrolls for groups of employees or even payrolls from different servers, you can minimise the total payroll processing time. SAP Payroll thus enables you, for example, (depending upon your hardware) to run payroll for over 40,000 employees in approximately two hours. By increasing your hardware, you decrease the processing time. Special Interest Group (SIG) - Human Resources Payroll One of the many tasks of the SIG is for our customers to give us feedback on business requirements for system enhancements and future development requests. The SAP Southern Africa web page also offers the SIG a customer chat box. This discussion forum allows customers to raise any topic of interest among themselves. Such communication exchanges promote a greater understanding and utilisation of the SAP System. 12

18 Continued Maintenance and Support SAP Payroll South Africa is delivered by SAP AG in Walldorf, Germany. Please contact SAP Southern Africa for assistance, including implementation, training, and support. We have offices located in Johannesburg, Cape Town, and Durban. You can also log messages with our Online Service System (OSS), where our dedicated team will be glad to assist you 24 hours a day. Ongoing Support For additional information, please call our toll free marketing hotline at: or send an to [email protected]. With SAP s South African Payroll... it s smooth sailing! 13

19 Index IndexI A Age letter 5 Audit trail 2 Authorisation 11 B Background processing 10 Balances and totals 3 Bank information 7 transfer 11 Bonus 8 C Check Digit Verification 5 Client/server software 2 Collective agreements 2 Controlling 11 Cost centres 9, 11 Customer Service System 13 D Data correction 10 protection 10 security 10 Deductions 9 Dependent coverage 6 Dynamic actions 8 E External insurance 6 F Factoring 2, 9 Finance 11 Flexibility 1, 3 G Garnishments 9 Gross calculation 2 H Hourly wage earners 7 I IMG 1 Implementation Guide 1 IRP5 4 L Leave 7, 8, 9 maternity 7, 9 sick 7 Legislative changes 5 Loans 2, 9 Lock mechanisms 10 M Maintenance 13 Medical aid 6 N Net calculation 2 O Once-off bonus 8 Online processing 10 Organisational assignment 7 P Pay basic 8 increase 8, 9 level 8 scale 8 Pay slip 2, 11 Payroll existing 10 scenario 12 Payroll run 9, 10 completed 9 parallel 12 regular 8 simulate 12 Pension fund 6 Personnel Administration 7 Posting to Accounting 11 I-1

20 I Index R Receiver of Revenue 4, 5 Remuneration 2, 7, 8, 9 Retirement 5 Retrenchment 5 Retroactive Accounting 2, 3, 4, 10 S Sick pay 9 Social Insurance 2, 6, 8 South African functions 4 Support 13 T Tax 2, 4, 5, 6 Termination 5 Time Management 7 U Unemployment Insurance Fund 6 V Valuate Time Data 7 Y Y2K solution 3 I-2