Creating Average Calculation Bases

Objective

After completing this lesson, you will be able to create an average bases calculation

Adjustment Rules

Images showing a hospital patient with an IV line, wearing a gown, and sitting on a bed thinks about sales discussions. A person in the HR department, wearing headphones, contemplates payroll remuneration and average values.

If an employee is sick or is on leave, certain remuneration elements such as commission, bonuses for piecework, and overtime are reduced for that employee. As a result, the employer often pays the average values of variable remuneration.

You can also use the average calculation procedure in HR Payroll for different purposes. For example, you can calculate average values for fixed payments.

Time Wage Type Valuation

Flowchart showing the processing of data from the input table to the output table. Specifies valuation basis, and depending on the response (yes or no), follows different paths for valuation.

In personnel calculation rule X015, the system checks if the internal table Input Table (IT) contains time wage types that have not yet been valuated. To do so, the system checks the contents of the value fields AMT (amount), NUM (number), and RTE (rate).

This results in one of the following situations:

If the RTE or AMT field contains an amount, the wage type is transferred to the internal table Output Table (OT).
If the AMT field is empty, the NUM field contains a number, and the RTE field contains a rate, then the NUM field is multiplied by the RTE field. The result is stored in the AMT field, and the wage type is transferred to table OT.
If only the NUM field contains an entry because only a number (for example, hours) was entered, and if the AMT and the RTE fields are both empty, the system queries whether a valuation basis has been specified for the wage type. If this is the case, the wage type is valuated using the specified valuation basis.
If no valuation basis is specified, valuation takes place according to the principle of averages if an average valuation is assigned to the wage type. If this is not the case, the wage type is not valuated using a monetary value.

Elements of Average Processing

Elements of average processing include the following:

Retrieve average bases
Determine the previous periods required
Perform a relevancy test for each period
Cumulate the average bases from the relevant previous periods
Include changes in pay
Calculate averages

Collective agreements often contain rules. According to these rules, in the case of absences, an average remuneration calculated from previous months must be paid.

To valuate absences according to the principle of averages, the following questions must first be answered:

How many periods are used to create an average?
Can a period be irrelevant to the creation of averages? (For example, if an employee takes unpaid leave throughout the whole payroll period.)
In such cases, what is the maximum number of periods that should be used to create averages?
What triggers a payment based on an average value (for example, an absence)?
What is the formula used to calculate the average value?
What value is used for new employees in the first payroll period, if there are no previous values available for calculating the average value?
Should an average value be adjusted if remuneration changes (for example, after a standard pay increase)?
Which wage types are included in an average value?

Calculate Average Values

Flowchart illustrating the calculation of average variable remuneration over payroll periods. It uses Basis A from periods n-3, n-2, and n-1. For the current period, averages are calculated through cumulation and division.

Remuneration elements included in averages are grouped into average bases for the relevant payroll period. They are stored together with the payroll results.

In a payroll period, in which a wage type should be remunerated with an average value, the average bases for the relevant previous periods are first cumulated. The average value is then calculated (for example, by dividing the total by the number of previous periods). The resulting value is then included in the employee’s remuneration.

Create Bases for Calculating Average Values

Tables displaying wage type assignments to bases for calculating average values. The first table shows wage type M110, while the second shows partial period parameter TASOLL, both active from 01.01.2010 to 12.31.9999.

The following are the steps for creating bases to calculate average values:

Specify which primary wage types and which partial period parameters should be included in which average calculation basis. The secondary wage types /201 – /232 are available as average calculation bases.
Create various average bases such as all overtime remuneration, all overtime bonuses, and all work on public holidays.
Specify which primary wage type should be included in which average basis.
Specify which wage type field ( RTE, NUM, or AMT) should be used with what percentage.

You can also include partial period parameters in the average calculation bases. As the system always reads the value of the number field from the partial period parameters, you only specify the percentage here.

Trigger the Valuation of Averages

Flowchart titled Leave with Average Valuation of Wage Type M400 Vacation Bonus splits into two paths: One path checks if an average calculation rule is assigned, leading to New average calc. procedure if yes. The other path considers processing class PRCL 15 specification n, leading to Old average calc. procedure if yes.

If a valuation basis has not been specified, but a specification has been assigned to processing class 15, the wage type is valuated according to the old principle of averages. In this case, the system accesses personnel calculation rule X016 (special processing for the valuation of time wage types).

If you assign an average calculation rule to a wage type in the view V_T51AV_P, it is valuated with the monetary value calculated by the new average calculation procedure.

If the processing class 15 is filled with a specification and is also assigned an average calculation rule for a wage type, the wage type is valuated using the new average calculation procedure (if you use the standard schema).

Create Average Calculation Bases from Overtime

Business Example

Your company decides to change the provision for the vacation bonus. Instead of a fixed amount per leave day, your company will pay the average of all remuneration for overtime over the past three payroll periods to all employees for each leave day. To do so, you need to calculate the average of different wage types.

Use the Project IMG to calculate the average bonus for different wage types.

ExerciseStart Exercise

Task 1

Steps

To create the average calculation bases, you must flag the following time and bonus wage types so that they are included in the appropriate average calculation bases, as described in the table below:

Current wage type	Wage type long text
3##1	Upt to 2 hours
3##2	From 3 hours overtime
3##3	Overtime on Sunday
3##4	Overtime on public holiday
3##5	25% bonus
3##6	50% bonus
3##7	75% bonus
3##8	100% bonus

Add the amount of wage types 3##1–3##4 at a rate of 100% to the basis for calculating the average value /201 and add the amount of bonus wage types 3##5–3##8 at a rate of 100% to /202. This ensures that /201 contains all basic overtime remuneration and /202 contains the bonuses for the calculation of averages.

To identify your time wage types and the bonuses derived from them, as relevant for average calculation, in Customizing, choose Payroll → Payroll International → Time Wage Type Valuation → New Averages → Create Bases for Calculating Average Values.

Choose the activity Form Average Bases from Wage Types. Enter your wage types 3##1 - 3##4 in the table with the average calculation basis /201. Enter 01/01/ of the current year through 12/31/ 9999 as the validity period. Select the checkbox for amount and enter 100.00 in the Percent field.

Press Enter and save your changes. These entries are listed in the following table:

Wage Type	AVBasis	Start Date	End Date	Amount	Percent
3##1	/201	01/01 current year	12/31/ 9999	X	100
3##2	/201	01/01 current year	12/31/ 9999	X	100
3##3	/201	01/01 current year	12/31/ 9999	X	100
3##4	/201	01/01 current year	12/31/ 9999	X	100

Repeat the above table entries for wage types 3##5 – 3##8, but assign them the average calculation basis /202 instead of /201. These entries are listed in the following table:

Wage Type	AVBasis	Start Date	End Date	Amount	Percent
3##5	/202	01/01 current year	12/31/ 9999	X	100
3##6	/202	01/01 current year	12/31/ 9999	X	100
3##7	/202	01/01 current year	12/31/ 9999	X	100
3##8	/202	01/01 current year	12/31/ 9999	X	100

Task 1: Task 2

Steps

Run payroll for period 07, together with a forced retroactive accounting run for the period 02. Check that the wage types /201 and /202 have been created as appropriate. If your results are correct for period 07, exit payroll.
1. On the SAP Easy Access screen, choose Human Resources → Payroll → International → Payroll → Release Payroll (for period 07).
2. On the SAP Easy Access screen, choose Human Resources → Payroll → International → Payroll → Start Payroll. Choose your selection variant and add the first day of period 02 in the Forced retro. accounting as of field. Run the payroll by using the Execute (F8) button.
3. To check that the wage types /201 and /202 were created, review the log for payroll period 02 and payroll period 05. Open the payroll log to the Final Processing block by choosing ADDCU → Output → RT. The total of the amounts of wage types 3##1, 3##2, 3##3, and 3##4 should equal the amount in /201. The total of the amounts of wage types 3##5, 3##6, 3##7, and 3##8 should equal the amount in /202.
4. If your results are correct, exit payroll for period 07. To do this, on the SAP Easy Access screen, choose Human Resources → Payroll → International → Payroll → Exit Payroll for period 07.

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