Payroll area

[Former Member]

Hi Experts,

Is it recommended to configure different payroll areas for different company codes & for different personnel areas.

Regards.

RK,

[former_member182306 · Accepted solution]

It depends on company requirement as said by praneeth. If you want to have one payroll area , You can have one payroll area for all company codes. If you want different payroll areas you can have different payroll areas for different company codes in same country and same in case for personnel areas..  since their balance sheet is different The company codes are defined based on countries. If your company having different units in different countries so there will be different company codes so in that case it is required to create different payroll areas.

The first question that arise why do we use payroll area?

The payroll area is used for whom payroll or payslip is run at once. Suppose if you want to run payroll for all employees in company Basically we will have one payroll area  so user can run payroll for all employees at once

When we use two payroll areas it mean that we are segregating payroll Like for example In a company if we have 200 employees working  The Payroll Area 1 for 100 employees will be run and For Payroll Area 2 Another 100 employees will be executed. So user has to execute payroll twice for 200 employees that is for payroll area 1 and payroll area 2

Payroll Areas  are created in the company based on requirements and consultant need to identify How many payroll areas are required to implement

For example In a company The payment of employees are on 1st and 10th of every month So it is advisable to create two payroll areas Because The payroll area is based on generation of periods that are defined.

Another Example If a Company is having Three different units in different locations It is advisable to create three payroll areas.

If a company is having different Payment Methods for example Salaried, Biweekly It is advisable to create two payroll areas based on different method of payment .

Finally It is you You need to identify How many payroll areas are required for the company based on employees and company codes. We can have different company codes for one country but we cannot have same company code for two countries Same in case with payroll area .

The Big Companies will have more than 10,000 employees so in that case it is always good to segregate payroll areas based on personnel area.

[Former Member · Accepted solution]

Hi Rajesh,

Thanks a lot for such detailed analysis of the scenario and valuable guideline.

For my scenario it can be managed with one payroll area, but considering any future complications like as mentioned by Javed, is it recomendeed to can go for one additional payroll area.

[former_member182306 · Accepted solution]

Hi Rishi,

Let me know How many personnel areas exits in your project?

Let me know how many employees are working?

Regards,

Rajesh

[Former Member]

Hi All,

Thanks for valuable guidelines and I got the suitable answer to resolve my quarry.

Regards,

RK,

[javed_shaikh2]

Dear Rishi,

Its better to have separate payroll area for each company code...because 2 companies might have different policies, so every month while payroll processing one company might be ready for payroll with all salary inputs while another company might not be, so if you have separate payroll areas one company can start with payroll processing

also while payroll posting you might come with the situation where one company's posting period not open so if you have both the company in same payroll area the posting will get held for both the companies.

so these are some of the situations which can be easily avoided by having separate payroll areas.

Thanks,

Javed Shaikh

[Former Member]

Dear Rishi,

Payroll area specifies the a group of employees for whom the payroll runs at the same time.

That means if frequency of payroll, payroll period and the payment date should be same for the same group of employees. It's not required to create multiple Payroll areas specific to PSA.

Regards,

Nayak

[Former Member]

Dear Its not Depend on Country Grp Nor PSA .

Payroll areas are used in SAP HR to group together employees for whom payroll is run at the same time, and also to set the dates for the payroll period. Employees from different employee subgroups can belong to the same payroll area.

[ShrutiJoshi]

Hi Rishi

If you start creating payroll areas as per company code or personnel area, the concept would lose its meaning. It is always expected that the employees are grouped together into a payroll area when their payroll frequencey and payroll date is same. That is how the meaning of the payroll area would stay intact. Also the number of payroll areas you would have to create this way would be much less than what you would have to create for company codes or PAs.

[vianshu]

Hi Rishi,

Check the frequency of payroll, payroll period and the payment date. If these parameters are same for all company codes then you can do with only one payroll area.

However, if any of the three parameters - frequency of payroll, payroll period and payment date - differ, then you will need more payroll areas.

I hope this clarifies your query.

Thanks and regards,

Vivek

[Former Member]

Hi Rishi,

As per my understanding if all the employees get paid according to same cycle and same way its not recommended.

[Former Member]

Hi,

It is all based on the client requirement.

for every company code different Payroll area is good practice. we can create one PY area to one PA but take care while assigning the payroll area to particular personal area. Feature ABKRS.