1. Purpose
This document is based on a customer specific requirement which was undertaken in a project. It describes the method and process to be followed for addressing the company car lease process
This can be considered if the following are applicable:
- Employer has Flexi allowance component
- Car Lease deduction should happen from flexi allowance component
- Deduction component should not be considered for Gross Income in income tax computation
2 Abstract
This document explains the step by step procedure to configure the car lease process
3 Description
3.1 End to End Process flow diagram
3.2 Description of Process steps
S.No | Process step Description | Performed by | Outcome of the step | Solution Description WRICEF ID – Details (Link with WRICEF table below) | SAP Transaction /Function |
1 | Start event : Wish to avail car lease | Employee | NA | NA | Manual |
2 | Approach admin for details | Employee | Employee would have approached admin department for collecting details | NA | Manual |
3 | Check for eligibility | Admin Department | Admin department would have checked for the eligibility | Admin department will check the eligibility by refereeing relevant policy documents | Manual |
4 | Not eligible | Admin Department | Admin department would have informed about the credentials | Admin department will inform employee that he is not eligible which in turn ends this process | Manual |
5 | Eligible | Employee | Employee would have approached vendor and would have got the quote | Employee approaches vendor and get quotation based on his eligible amount | Manual |
6 | Approve the quote | Admin Department | Admin department would have approved quote | Admin department verifies the quote and will approve | Manual |
7 | Reject the quote | Admin Department | Admin department would have rejected the quote | Admin department rejects the quote In case of mismatch in eligibility and quote | Manual |
8 | Make down payment to vendor | Employee | Employee would have made down payment to vendor | Employee will pay certain down payment to vendor based on the quotation | Manual |
9 | Registration in the name of the company | Employee | Employee would have registered the car in the name of the company |
| Manual |
10 | Handover the document | Employee | Employee would have handed over documents to admin department |
| Manual |
11 | Update car details in Infotype 0583 : Car and conveyance | Payroll Administrator | Payroll administrator would have updated the details of the car in car and conveyance infotype | Payroll administrator updates the employee master with car and conveyance details | PA30-IT0583 |
12 | Update the installment amount | Payroll Administrator | Payroll administrator would have updated the monthly installment amount | Payroll administrator will use IT0045-Loans infotype to update the actual car value, installment amount and closure period in employee master | PA30-IT0045 |
13 | Adjust flexi allowance against EMI | SAP | The employee flexi allowance would have deducted with EMI amount | Employee flexi allowance will be deducted with EMI amount during the payroll process. | Automatic |
14 | Convert car petrol allowance to reimbursement | SAP | Car petrol allowance would have been converted as reimbursements | Employee petrol allowance will be converted as reimbursement in payroll | Automatic |
15 | Process Payroll | SAP | Payroll process would have completed with installment deduction | Employee Payroll process will complete by deducting the installment amount | Automatic |
16 | Last installment check – No | SAP | System would have performed last installment check in payroll process | System checks for last installment if check. | Automatic |
17 | Last Installment check – Yes | SAP | If its last installment then petrol reimbursement would have been updated as allowance |
| Automatic |
3.3 System Configuration settings
The process to address the scenario is as follows:
| Description | Infotype | Rule/Wagetype | Place Holder in Schema |
1 | Create a Loan type called car Lease – Infotype 0045 – Loan type 3060 – Car Lease | Loans – 0045 & Subtype Car Lease (Eg : 3060) | - | - |
2 | Dynamic Action from Loans (IT0045) to Car and Conveyance (IT0583) to update the conveyance type and date based on the End date of Loans infotype | From Loans – 0045 & Subtype Car Lease (Eg : 3060) to Car and Conveyance (IT0583) | - | - |
3 | Write a PCR (Personnel Calculation Rule) to move the monthly instalment of Car Lease loan type to a custom wage type | - | YLOZ | INLN –Loan Accounting (YNLN) |
4 | Write a PCR (personnel Calculation Rule) to deduct the car lease installment amount from the Flexible component and Gross earnings | - | YCAR | INLN –Loan Accounting (YNLN) |
5 | Write a PCR (personnel Calculation Rule) to move the Car lease installment amount to a dummy wagetype | - | YFLX | INLN –Loan Accounting (YNLN) |
6 | Write a PCR (personnel Calculation Rule) to deduct the Car lease installment amount from Monthly regular Income for income tax calculations | - | YFL1 | INN1 – Gross to Net Calculations(YNN1) |
Special Scenarios
Follow the below steps In scenarios like Termination / Separation / purchase of the car by employee before closure of the lease period
- 1. Infotype 0045 – Loans subtype 3060 (Car Lease) has to be modified.
- a. Select special payment outside payroll in payments tab. Enter the balance loan amount
- b. Delimit the loans infotype for that particular month end
- c. Check that the special payment date from step 1 should be same as the delimitation date
- 2. Infotype 0583 – to be delimited / newly created with different conveyance type
3.3.1 Create Loan type – Car Lease
- SAP Customizing Implementation Guide à Payroll à Payroll India à Company Loans à Master Data à Maintain Loan Types
In this step, the following are defined:
- Loan type
- Country assignment for the loan
- Technical attributes (like installment or annuity loan)
Loan conditions (like reference interest rate, interest rate for employee, interest computation method, whether interest rate advantage to be computed, repayment start etc).
3.3.2 Dynamic Action – IT0045 to IT0583
A dynamic action to be created which populates infotype IT0583 (Car and Conveyance) in which the BEGDA will be ENDDA+1 of PA0045-Subtype 3060 and ENDDA will be 31.12.9999. The conveyance type should be ‘7 – owned car’
3.3.3 PCR to move the car lease installment to custom wagetype
Personnel calculation rule YLOZ – Store User Wagetype
Place holder in YNLN – Loan accounting
3.3.4 PCR to deduct car lease installment amount from Flexi Allowance and Gross
Personnel calculation rule YCAR Store User Wagetype
- 1016 – Flexi Allowance
- /101 – Gross Income
Place holder in YNLN – Loan accounting
3.3.5 PCR to move car lease installment to a dummy wagetype
The installment amount is stored in RT but,we need to do further processing and hence the amount is moved to dummy wage type (refer 3.3.6)
PCR – YFLX to move car lease installment amount into dummy wagetype.
Place holder in YNLN – Loan accounting
3.3.6 PCR to deduct the car installment amount from /124 – Monthly regular income
Rule YFL1 to deduct car lease amount from the Monthly regular income wagetype
Place holder in schema YNN1 – Gross to net calculation
4. Results
The following are the results from this method.
- Automatic deduction of car lease installment from Flexi Allowance in payroll processing which in turn reduce the errors from manual data maintenance
- Employee CTC report / Salary comparison will not be effected due to deduction of car lease amount
- Automatic updation of employee conveyance type on closure of Car Lease tenure which results in computation of tax exemptions/Driver Perk if any in right way
5. Conclusions
Most of the IT / Manufacturing sectors in India has the car lease process. It’s a standard and automated solution which eases the work of Payroll Administrator in any company
6. Source
Project experience
- Help.sap.com