That SAP Business ByDesign The payroll business scenario is designed to efficiently support the payroll process through an external payroll system. It combines the advantages of internal payroll accounting – transparency, monitoring and control – with the advantages of outsourced payroll accounting – lower costs, higher efficiency and a lower risk of liability. In the scenario of outsourcing business processes for payroll, the payroll service provider does the tax calculations and transfers the tax. It also arranges for employees to be paid salaries, which significantly reduces your administrative costs.

Scenario overview

In this scenario, you can also validate all input data for payroll in a preview of the data print before the data is sent to the payroll provider. This allows you to correct the data if necessary and you always have full control over payroll before it is started.

Business process: Define compensation guidelines

The HR administrator plans and designs the remuneration for employees, using appropriate reward strategies based on predefined remuneration structures and components. He sets up the remuneration structures and is also responsible for changes and adjustments. He adjusts point-based and tier-based compensation structures by editing compensation groups, compensation amounts, minimum and maximum amounts. The basic elements of the remuneration are the remuneration components.
The HR administrator also creates point and level-based compensation structures for all employee groups so that employees can be grouped according to their compensation packages. Remuneration structures increase transparency with regard to the company’s remuneration guidelines and enable an analysis of the remuneration in the various employee groups.

Business process: Prepare the billing process

The HR administrator plans the next regular payroll runs according to the payroll periods (for example, every two weeks, every six months) of the various payroll areas. Depending on the planned date of the payroll run, the clerk creates the payroll periods, uses them to plan the payment dates, the start and end of the payroll period and the key dates, i.e. the last dates on which the information relevant to payroll must be entered into the SAP Business ByDesign system all information is taken into account during the billing run.
The HR administrator is also responsible for smooth communication between the SAP Business ByDesign system and the system of the payroll service provider. It ensures that the tables with the assignments of the wage types to the service agent wage types, the time types to the service agent time types and the wage types for time accounts to the time account types of the service agent are correctly maintained and reflected in the SAP Business ByDesign system.

Business process: set employee remuneration

The HR administrator manages all salary changes for employees and adapts the allocation of the remuneration structures and groups: He adds new remuneration components and processes amounts for remuneration and deductions as required.

Business process: Maintain payroll master data for employees

During the hiring process in payroll, the HR administrator processes the employee’s payroll master data, such as the payroll area assignment, payment information and other information on other bank accounts. Depending on the country-specific regulations, it also manages the tax and social security data of the employees.

Business process: Collect and export input data for billing

The scenario for outsourcing business processes for a regular billing run in the SAP Business ByDesign environment begins with the collection of all new or changed billing, remuneration and time data in a billing data extract, which is systematically checked for inconsistencies. Errors in the deduction data are identified by the SAP Business ByDesign system and viewed and corrected by the HR administrator, whereupon the data deduction is created again if necessary. As soon as the data extraction is complete and there are no more errors, an XML file is created, downloaded and transferred to a payroll service provider.
The different variants in this process depend on how the data gets into the payroll service provider’s system. In all variants, it is important that the entire process of creating and transmitting data to the service provider is reproducible.

Business Process: Perform Payroll

The payroll service provider carries out the payroll and checks the payroll results for completeness and correctness. The service provider ensures that the calculation of taxes and social security contributions complies with the country-specific regulations.
If the payroll results contain errors because the data sent by the SAP Business ByDesign system to the service provider is invalid, the data must be corrected and the data extraction must be repeated. A new data file is then created in the SAP Business ByDesign system and transferred to the payroll service provider.

Business process: arrange employee payment

The payroll service provider initiates the salary payments to the employees. The way this process is carried out depends on the service provider. This scenario illustrates an example of a possible payment initiation process performed by the service provider. In addition, three alternative variants of this example process are presented.

Business Process: Perform Statutory Reports

This legally prescribed process includes the tasks of the payroll service provider of executing statutory reports for tax and social security, printing out forms for employees (e.g. remuneration statements) and authorities (e.g. contribution statements) and transmitting data to authorities in accordance with country-specific regulations.

Business process: post and close

The HR administrator extracts payroll posting data from the payroll service provider’s system and posts the payroll results generated by the service provider to the general ledger. In the last step, he closes the payroll period.

Source:, as of March 2017