Some companies may have the requirement to post an employee’s liabilities according to the employee’s expense account or want to see the account assignment (i.e., profit center) information about liabilities’ postings within the posting document. Prior to the release of SAP ERP Central Component (ECC) 5.0, you could not achieve these business requirements with SAP’s standard posting configuration. Now these business requirements can be met using the standard configuration under the SAP General Ledger (G/L) section in the IMG. This configuration simplifies implementation procedures and minimizes execution time. I show readers how to configure the G/L section using one of three available options.

Options for Posting Employees’ Liabilities in SAP Payroll

To illustrate my points I use example scenarios. Figure 1 shows the posting document of the liabilities section that is created by using SAP’s traditional posting configuration. Figure 2 shows the posting document of the liabilities section, which is created by using the G/L configuration.   The new G/L functionality offered by SAP ERP HCM provides businesses with three options for posting payroll liabilities to finance:

1. Posting liabilities according to an employee’s Organizational Assignment (infotype 0001).
2. Distributing liabilities according to an employee’s expenses.
3. Distributing liabilities according to an employee’s expenses taking into account the inflow principle.

Option 1: Posting Liabilities According to Organizational Assignment (Infotype 0001)

By using this option companies can post employee’s payroll liabilities according to the master cost center maintained on infotype 0001 (Organizational Assignment). During distribution of payroll liabilities the SAP ERP HCM system only considers the account assignment information, such as profit center and business area, that are assigned to a master cost center. The system does not take information from other account infotypes, such as infotype 0015 (additional payment) or infotype 0014 (recurring payments or deductions). In the SAP system, the traditional posting program does not read the account assignment information that is assigned to the employee’s master cost (on infotype 0001).

How to Post Liabilities Based on Employee’s Organization Assignment Infotype (0001)

You must follow these configuration steps to see the profit center information on the posting document for liabilities postings. This information is assigned to the employee's home cost center on infotype 0001. To complete this configuration, activate the switch to determine what distribution mode the SAP system needs to use while posting employee's liabilities. Follow IMG path Payroll > Payroll USA > posting to financial accounting > New General-Ledger: Distribution of liabilities according to expenses > Central settings > Define type of distribution. In the screen that appears (Figure 3), select the cost distribution type and enter the start and end dates. In this cost distribution scenario, you do not need to make any changes in wage type in the symbolic account configuration step.

How to Post Liabilities to a Profit Center That Is Assigned to a Master Cost Center

In this example I show you how expenses are posted to a profit center that is assigned to an employee’s master cost center. In my example, the cost center is 1000002 and the profit center is 9999999999. You access the master data cost center via transaction code PA20. The screen that appears (Figure 4) shows that the employee is assigned to cost center 1000002. Use transaction code PC00_M99_CWTR to get payroll results (Figure 5).   Use transaction code PCP0 to get to the posting document (Figure 6). The posting document shows to which G/L accounts the payroll results are posted. To get the details (e.g., wage type, employee number, payment amount, and profit center) for a particular G/L account, double-click the corresponding account number under the Account Number with Text column in Figure 6. In my example I want to see the details for G/L account number 215020 (Figure 7), so I double-click line 215020. You can validate the amounts shown in Figure 5 with the numbers shown in Figure 7.   You can view the account assignment information for the expenses and liabilities on the posting document only by accessing the detail view of the posting document.

Option 2: Distributing Liabilities According to Expense

By using this option a company can post an employee’s payroll liabilities according to the personnel expenses (i.e., earnings) account. During distribution of payroll liabilities the SAP system considers the account assignment information, such as profit center and business area, from all payroll infotypes (e.g., infotype 0015 [additional payment] and infotype 0014 [recurring payments/deductions]).

How to Distribute Liabilities According to Expenses

Follow these steps to configure SAP ERP HCM to post employee’s liabilities according to employee’s expenses and to also see the account assignment information for liabilities and expenses on the posting document. Step 1. Determine what distribution mode the SAP system should use when posting the employee’s liabilities. Follow IMG path Payroll > Payroll USA > posting to financial accounting > New General-Ledger: Distribution of liabilities according to expenses > Central settings > Define type of distribution. In the screen that appears (Figure 8) select the cost distribution type and enter the start and end dates.   Step 2. Assign a custom liability wage type (that needs to be posted according to an employee’s expenses) to a wage group table. By assigning a liability wage type to a wage type grouping, the SAP system distributes that liability wage type in the same manner as the wage type grouping (for example, a split in the employee’s pay). Follow IMG path Payroll > Payroll USA > posting to financial accounting > New General-Ledger: Distribution of liabilities according to expenses > Payroll > Maintain wage type grouping for cost distribution. In the screen that appears (Figure 9) enter the custom wage type and the respective wage type grouping wage type. Step 3. Assign account assignment type FC (FC is the balance sheet account indicator) to the liability wage types. Follow IMG path menu Payroll > Payroll USA > posting to financial accounting > New General-Ledger: Distribution of liabilities according to expenses > Posting transfer to Financial account > Modify account assignment types for symbolic account. In the screen that appears (Figure 10) select the Create Symbolic Accounts with Account Assignment Type FC option by double-clicking it. In the screen that appears (Figure 11) make sure that the symbolic accounts that are attached to liability wage types show account type FC (in the AATyp column). A symbolic account is the media through which payroll wage types are linked to G/L accounts on the finance side. Step 4. Assign the symbolic account to a wage type. Follow IMG path menu Payroll > Payroll USA > posting to financial accounting > New General-Ledger: Distribution of liabilities according to expenses > Posting transfer to Financial account > Modify account assignment types for symbolic account. If you do not assign a symbolic account to a wage type, the results are not posted to FI. In the screen that appears (Figure 12) select the third option: Define wage type posting attributes by double-clicking it. To post payroll results successfully to finance G/L accounts, you need to complete this next step, where you assign a symbolic account to the payroll wage types. In the next screen (Figure 13), select a wage type and double-click the Posting a Wage Type folder. To add a symbolic account to a wage type, select the appropriate wage type in Figure 13, double-click the Posting a Wage Type folder, and double-click the appropriate line under the SymAcc… column (Figure 14). Select the symbolic account code from the drop-down options that appear.   Step 5. Activate a payroll sub-schema and function in the payroll schema. You do this so that the payroll schema can read the entire configuration related to a posting of an employee’s liabilities according to an employee’s expenses. This step is critical to complete the configuration. The SAP system does not display an error message if this step is not taken; however, if it’s not, the results in the posting document will be incomplete. Enter transaction code PE01 to call your custom payroll schema. In the screen that appears, enter your payroll schema code (in my example, it’s ZEXA). Click the Change button (Figure 15).   Scroll all the way down to the bottom of the schema (Figure 16) and double-click sub-schema UEND.   In the screen that appears (Figure 17), activate the line that has payroll function XCODI. You do this by removing the asterisk in the D column. Note that the default in the SAP system is for the asterisk to appear in the D column for this payroll function.

Note If you are using the regular posting program (RPCIPE00) to do payroll to FI posting, then you need to activate payroll operation XCDOI in the payroll schema. If you are using the new posting program (RPCIPE01) to do payroll to FI posting, then you need to activate payroll operation XLIDI in the payroll schema. Here are some more details about these payroll operations. For operation XCODI, if you activate this function in the payroll schema then you only can use the old posting program (RPCIPE00). This function only supports distribution number 2 (posting employee’s liabilities based on expenses). For operation XLIDI, if you activate this function in the payroll scheme then you only can use new the posting program (RPCIPE01). This function supports distribution option 2 (posting employee’s liabilities based on expenses) and option 3 (posting liabilities based on the expenses inflow principle), but not option 1. If you activate this function in the payroll schema, then you have to assign account assignment type FC to a liability symbolic account.

Example: How to Distribute Liabilities According to Expenses

In this example, I show you how an employee’s total pay period tax liability (federal withholdings) amounts are distributed to finance according to employee’s payroll expenses. In this scenario an employee is moved to a different position in the middle of the pay period. The pay period is a semimonthly pay period, and the pay period is 02/01/2013 to 02/15/2013 (04.2013). Execute transaction code PA20. In the screen that appears (Figure 18) you can move the employee from cost center 1000002 to cost center 1000003 on 02/10/2013 using transaction code PA40. (Table 1 shows a different view of this information.) Figure 18 shows the date ranges and the respective cost center and profit center combinations. Use position change PA (personal action) to move the employee between cost centers.   Execute transaction code PC00_M10_REC. In the screen that appears (Figure 19) you see the payroll reconciliation report for the 04/2013 pay period (this is the pay period when the employee changed cost centers). The payroll reconciliation report is the standard SAP system payroll report that displays the employee’s payroll results for the selected pay period.   After running payroll, execute transaction code PC00_M99_CIPE to generate the posting document. To view the generated posting document, execute transaction code PCP0 (Figure 20). The posting document is the one single document in which you can see which payroll results are getting posted to which G/L account on the FI side. On the posting document you also see the account assignment information, such as the profit center (Figures 21 and 22).   In the posting document (Figure 20), double-click the appropriate G/L account number (in the Account Number with Text column) to display the details for the G/L account (number 215100 in my example), shown in Figure 21. The partial amount of the tax withholding amount is posted to profit center 99999999999 (Figure 21). This is the tax withholding amount for the earnings that the employee earned during the period from 02/01/2013 to 02/09/2013, when he was assigned to cost center 10000002. If you want to see how the SAP system distributed the federal withholding amounts according to the employee’s expenses, double-click the line that you want to see more details about (Figure 21). The remaining tax withholding amount is posted to profit center 1234567891 (Figure 22). This is the tax withholding amount for the earnings that the employee earned during the pay period 02/10/2013 to 02/15/2013 when he was assigned to cost center 10000003.  

Option 3: Distributing Liabilities According to Expenses Taking the Inflow Principle into Account

  By using this option companies can post employee payroll liabilities according to the personnel expenses (i.e., earnings) account. During distribution of payroll liabilities, the SAP ERP HCM system considers the account assignment information (i.e., profit center and business area) from all account infotypes, such as infotype 0015 (additional payment) and infotype 0014 (recurring payments/deductions). In this case, inflow liabilities are postponed to the relevant outflow periods, and liabilities are distributed based on the period of origin. By using this distribution method companies can see the detailed breakdown of the retroactive period amounts on the posting document. In the standard SAP ERP HCM system posting program, companies cannot post employee’s payroll liabilities according to the employee’s personal expenses account. In addition, the traditional posting program does not read the account assignment information from the employee’s master cost center.  

How to Distribute Liabilities According to Expenses Taking the Inflow Principle into Account

  Follow these steps to configure the SAP ERP HCM system to implement this option. Step 1. Determine what distribution mode the SAP system needs to use while posting an employee’s liabilities. Follow IMG path menu Payroll > Payroll USA > posting to financial accounting > New General-Ledger: Distribution of liabilities according to expenses > Central settings> Define type of distribution. In the screen that appears (Figure 23), select the cost distribution type and enter the start and end dates.   Step 2. Assign the custom liability wage types (that need to be posted according to employee’s expenses) to a wage group. By assigning a liability wage type to wage type grouping, the SAP system distributes that liability wage type in the same manner as the wage type grouping (e.g., a split in the employee’s pay). Follow IMG path menu Payroll > Payroll USA > posting to financial accounting > New General-Ledger: Distribution of liabilities according to expenses > Payroll > Maintain wage type grouping for cost distribution. In the screen that appears (Figure 24), enter the custom wage type and the respective wage type grouping wage type.   Step 3. Populate the retroactive accounting table with the custom liability wage types. In this step you specify what liability wage types are to be used and how they are to be handled in the retroactive payroll accounting run. The SAP system determines how to handle the liability wage types during payroll to FI posting when payroll is run retroactively, based on the data in this table. Follow IMG path menu Payroll > Payroll USA > posting to financial accounting > New General-Ledger: Distribution of liabilities according to expenses > Payroll > Maintain relevant wage types for retroactive accounting differences (Figure 25). For specified wage types (i.e., a customer-specific wage type) you also specify whether the SAP system needs to consider the gross or new retroactive difference amount while distributing liability amounts to FI. Step 4. Assign account assignment type FC to the liability wage types. Follow IMG path menu Payroll > Payroll USA > posting to financial accounting > New General-Ledger: Distribution of liabilities according to expenses > Posting transfer to Financial account > Modify account assignment types for symbolic account (Figure 26).   Once you get to the screen in Figure 26, select the second option: Create Symbolic Accounts with Account Assignment Type FC. In the next screen (Figure 27) make sure that the symbolic accounts that are attached to the liability wage types have account type FC (this information appears in the AATyp column).   Step 5. Assign the symbolic account to a wage type. Follow IMG path menu Payroll > Payroll USA > posting to financial accounting > New General-Ledger: Distribution of liabilities according to expenses > Posting transfer to Financial account > Modify account assignment types for symbolic account (Figure 28).   To post payroll results successfully to finance G/L accounts, you need to complete this step. In this step you assign a symbolic account to the payroll wage types. Once you get to the screen in Figure 28, select the third option: Define wage type posting attributes and double-click it. In the next screen (Figure 29) select the appropriate wage type and double-click the Posting a Wage Type folder, on the left.   To add a symbolic account to a wage type, select the symbolic account code from the drop-down options in the SymAcc… column (Figure 30).   Step 6. Activate a payroll operation in the payroll schema so that the payroll schema can read all configuration related to posting employee’s liabilities according to the employee’s expenses. This step is critical to complete the configuration. The SAP system does not display an error message if this step is not implemented; however, if it is not done, users do not get the expected results on the posting document. Enter transaction code PE01 to call your custom payroll schema, which is ZEXA in my example (Figure 31). Press the change button (Figure 31), scroll all the way down to the bottom of the schema (Figure 32), and double-click sub-schema UEND. In the next screen (Figure 33) you can edit your custom sub-schema. Activate the line that has payroll function XLIDI by removing the asterisk in column D (Figure 33). In the standard SAP system, the asterisk is pre-populated in this column for this payroll function.  

Example: Distributing Liabilities According to Expenses Taking the Inflow Principle into Account

  Now I show you how an employee’s total pay period’s federal withholding tax amount, including the retroactive federal withholding tax amounts, are distributed to FI according to the employee’s payroll expenses. In this example, the employee had a retroactive date pay increase in pay period 08/2013; the retroactive pay increase date is 03/01/2013. The pay period is a semimonthly pay period, and the pay period is 04/01/2013 to 04/15/2013 (08/2013). Execute transaction code PA20 to go to infotype 0008 (basic pay), shown in Figure 34. On this screen you can see that the employee’s pay is increased to $4,166.67 for the pay period with the effective date of 03/01/2013. By using the pay increase PA (personal action) you can change the employee’s pay by executing transaction code PA40. Using transaction code PC_PAYRESULT, run payroll, which opens the screen shown in Figure 35.   After running payroll, run program RPCIPE01 using transaction code PCP0. The next screen (Figure 36) shows the posting document for the pay period 08/2013.   To get the details for your posting documents, double-click the appropriate G/L account number in the Account Number with Text column (Figure 36). Figures 37 and 38 show how the SAP payroll system distributed the employees’ withholding liability amounts for the current and retroactive payroll periods for G/L accounts 215100 and 217200, respectively.