General Idea About UK, US, Indian Payroll
These are the differences among Indian, U.K and U.S payrolls:
Differnce between the US and Indian payroll can be broadly categoried on two basis :-
1. For Contract Employees
2. For Salaried Employees
For salaried employees, mostly the norms are same, but most of the employees are on contract basis Therefore their classification is mainly on two grounds W2 and 1099. In W2 company pay the taxes and in 1099 employee pay the taxes.
The contract employee fee is mainly based on hourly basis for which they are billed. But the vendor takes care of the contract employee salary. This means the company send a time sheet to the vendor and vendor then makes the payment to employee.
SAP has given country specific payrolls for more than 38 countries and periodically SAP is releasing the country versions for new countries Each country specific version is called country version. When sap says country version it includes country specific civil, tax laws, contributory and other tax laws (all these details are populated in the country specific info types).
Pay roll driver and Schema:
- For each Payroll country version there is a country-specific payroll driver with the technical name RPCALCx0 or HxxCALC0 .
- For programs with the technical name RPCALCx0 , the x is replaced with a country indicator, for example, Z for South Africa D for Germany, , or X for "Other countries".
- For programs with the technical name HxxCALC0, the xx is replaced with the ISO code of the respective country, for example MX for Mexico, or G.B for U.K.
Pay roll schema:
- The payroll schema contains calculation rules to be used by the payroll driver during payroll. SAP has developed country-specific schemas which are based on standard schema X000. When it is country specific ,the first character in the name refers to the country indicator (for example, G for U.K, F for France D for Germany etc.). When you run any country’s pay roll in the sap system some common info groups which are part of international pay roll and personnel administration.
Some of them are:
- Personnel data ( address-6, bank details97 personal data-2,challenges-4 etc..)
- Actions ( 0000 info type)
- Organizational data
- Contractual and contract agreements (Company Instructions info type 0035 , Corporate Function 0034 ) Etc.,
So when run a pay for a specific country, besides general information valid for the international pay roll, one needs to enter specific details in the particular info types for example if you are running U.K pay roll you need enter The National Insurance number (NI number) used by the Contributions Agency (CA) to uniquely identify an employee in the info type 0002-personal data and if its U S pay roll there is social security number and if its south Africa it some SARS code etc.. all these are available in personal data-national features.
Apart from these they are some country specific info types for each country pay roll. For U.K pay roll there are some specific info types:
- Tax Data Info type 0065—PAYE (Pay as you earn) details are stored.
- WFTC/DPTC Info type 0087- employees tax credit details are stored.
- National Insurance Info type 0069 National Insurance –Info type 0069.
- Pension Funds Info type -0071 .
- Court Orders/Student Loans (info type 0070) record for them with the appropriate court
order subtype.
- Court Orders/Student Loans (Info type 0070): to record and deduct student loan repayments as specified by the Inland Revenue.
- Company Cars- Info type 0442.
- Offshore Tax GB -Info type 0570.
This info type allows you to record an employee's tax details for Isle of Man, Jersey, or Guernsey and Alderney Offshore Social Security GB -Info type 0571 to record an employee's social security details for Jersey or Guernsey and Alderney.
Then there is SMP SSP details specific to U.K pay roll:
- SMP is Statutory Maternity pay.
- SMP is Statutory Sickness pay
- SAP -Statutory Adoption Pay and
- SPP- Statutory Paternity Pay.
The rates for SMP,SSP,SPP and SAP vary, so accordingly they need to be updated with the latest changes. Every year like Indian Tax rates , there in U.K also changes take place with regard to Tax slabs ( which needed to be reflected in PAYE.. Pay as you earn), civil and social and tax laws. In fact from Oct 2006 this year, there are going to be many changes in the various laws related to employees in U.K All this need to be populated in respective info types. Like wise U.S pay roll has got some specific info types which are large in number as it has a complex system in place.
This is general idea about U.K pay roll.
