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SAP HR : Payroll Area

SAP Payroll area is used to group together employees for which payroll is run at the same time, and set the dates for payroll period. Employees from different employee subgroups can belong to the same payroll area. Basic Criteria for new Payroll area are frequency of Payroll and Pay Date. Frequency of payroll area may be weekly , monthly, fortnightly etc.

Payroll areas facilitate the following functions in Payroll Accounting:

  • Personnel numbers that are to be included in the same payroll run are grouped together
  • Defines the exact date for Payroll period
  • Employees to be included in a payroll run at the same time and for the same payroll period are grouped into one payroll area

Selection criterion for many payroll processes (payroll run, the remuneration statement, and evaluation reports, etc.)

Further selection criteria can be used to select fewer employees for payroll run. Example: cost center, ESG.

Payroll Area can be defaulted using Feature ABKRS to default value for the ‘Payroll Area’ field in Infotype 0001 (Organizational Assignment).

Wage Type Structure

Wage types are the key elements in the Wage Structure and is used for assigning payments and deductions & to control Payroll program


  • Primary Wage type:
    • Payments & deductions assigned using Primary Wage type
    • Denoted by Alpha numeric characters
    • System delivered Wage types can be copied and customized
    • Part of the Master data
  • Secondary Wage type (Technical wage type)
  • System defined wage types for internal calculations and storage like for example all commutations are stored in a Secondary wage type (Gross, net, quarterly gross etc.,)

By Gopichand Panghate (on behalf of SAP Consulting Team)

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