Setting up and Running Off-Cycle Payroll Process Configuration

In this unit, you’ll learn about running both regular and off-cycle payroll. Let’s start by discussing the difference between regular and off-cycle payroll.

Regular payroll is conducted in fixed, regular intervals, called payroll periods. During regular payroll, relevant payroll data needs to be locked. An off-cycle payroll is only conducted on an as-needed basis. Sometimes a customer will need to run payroll for some specific reason between regular periods and an off-cycle payroll allows them to do this.

Let’s talk more about regular payroll.

Regular payroll includes the following features:

• Runs at fixed, regular intervals (payroll periods).
• Payment is made on a fixed date (payment date).
• Calculates all payroll-relevant data for the period in question (basic remuneration, special payments, overtime payments, bonuses, taxes, garnishments, loans, and so on).
• Must be completed for all employees from the payroll area without any errors.

When you run regular payroll activities, you must specify the payroll area on the payroll driver selection screen twice - once to determine the current payroll period according to the control record of the payroll area. The system determines the payment date by setting up payroll periods. Then you will complete the payroll activities for the corresponding payment dates.

Image 1 in the figure shows the selection screen of the report RPUCTP00 where the Payment Day rules and Number of days fields allow you to specify how the payment date should be calculated for each generated payroll period. These payment dates will be relevant for all payroll areas with the same combination of date modifier and period parameter.

Image 2 in the figure shows where you can check and manually change the payment date after generation by the report RPUCTP00. For example, the generated payment date falls on Sunday (March 31 and you need to move it to Friday (March 29).

For regular payroll, there are specific attributes that don’t require additional information. The regular payroll run is possible when the control record of the payroll area is set to the status Released for payroll. Additional information must not be specified on the payroll driver screen.

Keep in mind the following parameters:

• Previous/already calculated payroll: Changes in relevant payroll data for previous (already calculated) periods lead to recalculation.
• Current payroll: A productive payroll run is possible only for the current payroll period.
• Future payroll: Productive payroll for future periods (after the current payroll period end date) is impossible.

Next, let’s talk about off-cycle (OC) payroll. Recall that OC payroll occurs outside of a regular payroll period and requires additional planning. Considerations for OC payroll include the following:

• Off-cycle carries out specific off-cycle payroll activities for individual employees on any day after the payment date of the closed payroll period and before the payment date of the next payroll period.
• Off-cycle reasons differentiate between various types of off-cycle payroll runs.
• Off-cycle is possible when the control record for the payroll area has the status Exit payroll.

There are two prerequisites for running OC payroll:

1. The current payroll period is closed.
2. The off-cycle will run on dates between the current payroll period payment date and next payroll period payment date.

Think of OC like a puzzle: we are only able to run OC if the regular payroll is closed and all activities for regular payroll run were completed. If you need to run additional calculations, you’re only able to do this if the status of the regular payroll area status is set to Exit Payroll.

Next, let’s talk about two different types of OC payroll types: Payroll Type A and Payroll Type B.

There must be a serious reason to perform an OC calculation, for example, waiting to pay a holiday bonus for employees. Another example might be to make a payment if an employee left the company in the middle of a payroll period.

Payroll Type A is used for specific situations. For Payroll Type A, the system will search for information for future payments. For example, we want to pay employees an annual bonus without waiting for the next regular payroll run. In that case, we need to create a record 0267 IT "Additional Off-Cycle Payments" and specify the off-cycle reason, payment date, and payroll ID in addition to the wage type and amount.

For Payroll Type A, you must enter the same data in the selection screen for the process or the payroll driver as you did when you created the infotype record. Payroll type (determined automatically according to the off-cycle reason), off-cycle reason, payroll identifier, and payment date must be accurately provided.

This applies to the following entries:

• Off-cycle reason
• Payroll type
• Payroll identifier
• Payment date of the off-cycle payroll run

You can create record of 0267 IT "Additional Off-Cycle Payments" for the selected employee using the Off-cycle Workbench transaction. First, you must enter payment information on the transaction screen, then perform off-cycle calculation and check the result. Finally, you can save the infotype record. Payroll Identifier (PAYID) allows us to perform a few off-cycle payroll runs on the same date.

Payroll Type B is used when you need to make corrections in an already calculated period. For example, if a serious mistake has occurred in the past.

Therefore, a correction is the main reason for Payroll Type B. For payroll type B, the off-cycle reason type allows you to trigger a correction run due to changes in payroll-relevant data in already processed periods.

Here are some differences between Payroll Type A and Payroll Type B:

• Payroll Type A will search for information in the future (using specific infotype).
• Payroll Type B doesn’t take into consideration any information after the current payroll period— it will only search for corrections in an already calculated payroll period. Payroll Type B will run a new off-cycle calculation for the corrected information to fix errors or consider some new data from the past.

When starting the OC calculation, provide the reason and define the payment dates (between current and next payroll period). You can use any date after the payment date of the current payroll period and before the payment date of the next regular run.

To summarize:

• Type A: Enter information for the specific IT in the future, so provide correct information for the payroll driver.
• Type B: System will only check the info in the past, so it is flexible for payment dates.

Mass off-cycle calculations can be run via the payroll driver. The Off-Cycle Workbench transaction is used for individual off-cycle calculations. The figure, Off-Cycle Workbench, shows the screen of the Off-Cycle Workbench for a single personal number. The transaction PUOC_XX (where XX - country grouping) is used for an Off-Cycle payroll run for an individual person number, and then it is necessary to execute subsequential activities (posting, printing pay slip, and so on).

This system uses this specific format for storing OC payroll results.

In the figure, Comparing Type A and Type B Payroll Results, you can see how the system stores payroll results for regular run, Type A, and Type B. Note that Type B shows type, reason, identifier, and dates.

It is possible to run OC calculations for any country from this list by using SAP payroll. When running payroll for any country on the list, they will have a standard SAP delivery.

There are some prerequisites for running OC via Payroll Control Center. You need to activate:

• Business function
• UI applications
• OData services

To set up specific attributes for the off-cycle payroll process, you must provide specific attributes: reason, payment date, and probably payroll identifier.

• Image 1 in the figure shows the front end of Payroll Process Type A.
• Image 2 in the figure shows the back end process for configuration.

For Payroll Process Type B, there is a specific UI called OC request. This is the same as an Off-Cycle Workbench. For an off-cycle request, all calculations will be executed when the request is created. Then you must execute all activities related to the Off Cycle calculation.

Let’s look at an example of how a payroll administrator can pay the missing hiring bonus after the closing of the current payroll period.

Let’s say a team member discovers that an employee was not paid a hiring bonus. To rectify the situation, the employee needs to be paid this bonus as soon as possible. So, the HR specialist can use the registered wage type 5555 in 0015 IT on the date of the already closed payroll period. To do this, the HR specialist will need to use a 0015 infotype (pictured in the images below). This process shows how the correction can be made by the payroll administrator to recalculate the specific period – which will appear in the next payroll round.

During an ad hoc off-cycle process, there are subsequent activities which must be executed after off-cycle payroll calculations, such as posting, bank filing, and pay slips. The payroll team will need to create a separate OC request for the specific dates and specific persons.

Consultants will prepare the initial process type. Then, the Payroll Process Manager will prepare the actual process based on this process type for the payroll area and specific payment date.

The figure, Ad Hoc OC Process Type Settings, shows the process type specific categories for an ad hoc off-cycle. When using off-cycle, you need to use information about payment dates, rather than periods. You won't find any payroll calculation step in this process flow, because off-cycle calculation will be performed with an off-cycle request. But, you will only be able to create an off-cycle request if a payroll process with subsequent activities is created on a date that satisfies the following condition:

The payment date specified in the process is not earlier than the date used for the off-cycle request.

Let’s have a look at the ad hoc process type.

For your payroll process type, you will need to use a specific category, AO Ad Hoc Off-Cycle and define the recurrence type as BONDT Off-Cycle payroll payment date. Until now, for all payroll processes related to regular payroll, we have used the payroll period here. This is key difference between regular payroll process and off-cycle payroll process.

Let’s go through each of the eight steps to set up this process type.

First, you will provide information about the specific program and variant. Each step needs to match the program and variant, and you’ll need to ensure that there is no payroll or monitoring step in the process template.

The figure, Ad Hoc Off-Cycle Process Type: Step 2, shows what program will be called with the correct variant for the process step.

Step 3 shows the different program with different variants.

It is necessary to specify a country-specific payslip generation program and a program variant, which will define a form customized according to the customer's requirements.

In addition to generating payslips for all employees, you may have a customer who also requires printed payslips. In this case, the Payroll Process Manager needs to specify the default printer in the user’s own data (use transaction su3). The figure for step 5 shows how to complete that process to assign the correct printer.

Next, you will use Report RPCDTAX0.

Next, you will specify the program name and variant, which is used for the generation of bank file.

This is the last step to create an ad hoc off-cycle process type. Remember that a super admin will complete the ad hoc off-cycle process type preparations. However, you will validate and save the ad hoc off-cycle process type.

Now that you have completed the process type configuration, let’s look at what the Payroll Process Manager needs to do to complete the process settings for an ad hoc off-cycle.

The Payroll Process Manager will configure the ad hoc off-cycle process. To do this, they will provide information about the payroll area and the exact payment data for the given payment.

The Payroll Process Manager must provide the following information:

• Payroll area
• Payroll reason
• Payment date

For the same combination of payroll area and off-cycle reason, there must be only one upcoming (that is, not started) ad hoc off-cycle subsequent process.

If there is more than one upcoming ad hoc off-cycle subsequent process that has the same combination of payroll area and off-cycle reason but different pay dates, only one such process is recognized when you create the ad hoc off-cycle request. In this case, you can't choose the pay date to create off-cycle requests.

After creating the process, the Payroll Process Manager can locate it under the off-cycle tab. The figure, Using the Off-Cycle Tab, shows that there aren’t any OC requests at this time.

After the process has been configured, Payroll Process Manager will create an off-cycle request using a specific application. The Payroll Process Manager provides the personal number and reason and payment date, then the system double-checks payroll relevant data for the personal number for already calculated periods. If there are there any changes, the system then allows an OC request to be created.

There are two prerequisites:

• Payroll-relevant data changes for already calculated periods for specific employee
• Creation of the ad hoc process

The system will calculate the OC request when the Payroll Process Manager chooses the button in the blue box, shown in the figure, Create New Off-Cycle Request.

Next, the system calculates and provides information regarding the payment. If the Payroll Process Manager saves this request, the payroll results will be saved in the database. Then, it is possible to execute subsequent activities.

When the Payroll Process Manager selects the Save request button, they will check payslips with this OC calculation result. It is important to note that the system will check the information against the already calculated period.

If at least one non-canceled request exists and all required Off-Cycle requests are created for the specific payment data (BONDT), the Payroll Process Manager can start the ad hoc off-cycle process.

When you have payroll results for the OC request, you can start the activities regarding these payroll results, such as posting documents, transfer the document, generate bank files, and so on. The system automatically links the ad hoc off-cycle request with the correct process.

As a last step, the Payroll Process Manager will follow all of the steps defined during the configuration process.