New Social Insurance Solution

(1)

New Social Insurance Solution

- For Qatar Private and Public Sector

(2)

Contents________________________________________________________________2 1 General Introduction of the LC ___________________________________________3 2 Key Features __________________________________________________________4 2.1 Contribution Base Calculation ____________________________________________________ 4 2.2 Minimum/Maximum limitation check when calculate the base ____________________________ 4 2.3 Different contribution rule for the same allowance wage type _______________________ 5 2.4 Base re-calculation period ____________________________________________________ 5 2.5 Special contribution rule during the Hiring/Termination period ____________________________ 5 2.6 Absence processing _________________________________________________________ 6 2.7 Other New functions _________________________________________________________ 6 3 Solution Introduction ___________________________________________________7 3.1 Basic Customizing __________________________________________________________ 7 3.1.1 Fund Type Definition _______________________________________________________ 7 3.1.2 Allowance Contribution Rule ________________________________________________ 15 3.1.3 Absence for Fund Type ____________________________________________________ 17 3.1.4 Contribution Rule during Join or Exit SI ________________________________________ 19 3.2 Social Insurance Infotype Enhancement _______________________________________ 21 3.2.1 IT3301 - Social Insurance Qatar _____________________________________________ 21 3.2.2 Feature 'QASIF' __________________________________________________________ 22 3.2.3 Feature 'QASIS' __________________________________________________________ 22 3.3 Payroll Enhancement _______________________________________________________ 24 3.3.1 Wage types used in the new SI solution _______________________________________ 24 3.3.2 Payroll Schema Enhancement _______________________________________________ 26 3.4 Special Scenarios Handling __________________________________________________ 28 3.4.1 SI Base Adjustment Manually _______________________________________________ 28 3.4.2 Join and terminate in same month ____________________________________________ 28 3.4.3 Retroactive ______________________________________________________________ 28 3.4.4 Contribution greater than actual income _______________________________________ 28 4 Implementation Guide _________________________________________________29 4.1 Common Steps for both New Customer and Upgrade Customer ___________________ 29 4.1.1 Fund Type Definition ______________________________________________________ 29 4.1.2 Schema Change__________________________________________________________ 29 4.2 For New Customer _________________________________________________________ 31 4.2.1 Active the feature 'QASIF' __________________________________________________ 31 4.2.2 Active the feature 'QASIS' __________________________________________________ 32 4.2.3 Hide the old 'SI Fund Type' field by V_T588M Manually ___________________________ 32 4.2.4 Maintain Infotype 3301 - Social Insurance Qatar _________________________________ 33 4.2.5 Initialize the Contribution Base_______________________________________________ 33 4.3 For Upgrade Customer ______________________________________________________ 38 4.3.1 Step 1: Delimits Records of Infotype 3301 ______________________________________ 38 4.3.2 Step 2: Adjust Contribution Base _____________________________________________ 40

(3)

1 General Introduction of the LC

Ø Base on law #4 for year 2007 for extension of the unified social insurance coverage across all GCC nationals working at Qatar, contribution base calculation lists all people who were involved in the creation of this document and who should be involved in the final review and sign-off of this document.

Ø All GCC nationals covered by this law in Qatar and enrolled under this insurance law will not be entitled for end of service compensation

Ø In case Full contribution to be paid at Hiring month: This work as follows:

a. Employer will share the contribution with the employee from the joining date till end of the month

b. While employee will cover the full contribution for the other days.

c. E.g. Kuwaiti employee join 20/1 then from 1 to 19 the employee will cover 18.5% (Basic + allowances) while from 20 to 31 employee will cover (8.5 % basic + 18.5 Allowances) and employer will cover 10% basic.

Ø Same Logic is applied in case Full contribution to be paid at the termination month Ø In case there is minimum for contribution basis and employee salary is below this min.

so; employee should bear the difference between the min. basis salary and the actual salary. E.g. Omani Employee salary is OR 160 then, employer will cover (9.5% of 160) and employee will cover 6.5 % of 160 + 16% of (180 – 160).

Ø As general rules: employee will cover the contribution differences that results from a. Contribution basis differences against the min. and max.

(4)

2 Key Features

2.1 Contribution Base Calculation

Ø In New Solution

Except Qatari employees, Employer will only share the SI contribution on Basic salary; employee him/herself should burden both the EE and ER rate.

For example:

· Contribution Rate : EE Rate: 9% ER Rate: 9%

· Basic Salary : 8000 QAR

· Housing Allowance : 1000 QAR

· EE SI Contribution = 8000 * 9% + 1000 * (9% + 9%)

· ER SI Contribution = 8000 * 9%

Ø In Old Solution

Only calculate one base, and EE and ER share contribution on this base In previous example:

· EE SI Contribution = (8000 + 1000) * 9%

· ER SI Contribution = (8000 + 1000) * 9%

2.2 Minimum/Maximum limitation check when calculate the base

When employee's total payment doesn't meet the minimum/maximum contribution limitation, the variance part should be customized to specify who will burden the delta amount, in most of the cases, for Non-Qatari, the

employee should burden this variance part.

Additionally, for non-Qatari employee, there is also cross check against the employer's fund. This logic will be illustrated in the following chapter.

For example:

· Kuwaiti employee works in Qatar

· Contribution Rate : EE Rate: 9% ER Rate: 9%

· PIFSS Minimum limitation is 1000 QAR (After currency exchange)

· Basic Salary : 700 QAR

· Housing Allowance : 100 QAR

· EE Burden the delta

· Delta amount = 1000 - (700 + 100) = 200 QAR

· EE SI Contribution = 700 * 9% + (100 + 200) * (9% + 9%)

· ER SI Contribution = 700 * 9%

There is fixed logic: Employer always share the delta contribution In previous example:

· EE SI Contribution = 1000 * 9%

(5)

2.3 Different contribution rule for the same allowance wage type

For one allowance wage type, it may be included into the SI contribution base in one fund type, but for others, it is not.

Also, there should be a customizing about who is responsible to pay the allowance contribution, i.e. employee only, employer only, or both.

For example:

'M025 - Housing Allowance' need to be included in SI base for KSA, but for Kuwait it is not.

The processing class 63 is controlling whether one allowance wage type need to be included into the SI validation base or not. Once it is determined, i.e. this wage type will be included into the base for all the fund types.

For example:

The housing allowance needs to be included into SI base for KSA, but not for Kuwait, so you should make the customizing as follow:

· '9025 - Housing Allowance (For KSA)', set Processing Class 63 with '2'

· '9026 - Housing Allowance (For KW)', set Processing Class 63 with blank

2.4 Base re-calculation period

For each fund type, it can be customized easily in which payroll period the SI base should be re-calculated.

For example:

PASI - Oman Private Sector

Base re-calculation will only happen in EE's hiring period or Jan. in ever year.

2.5 Special contribution rule during the Hiring/Termination period

In order to avoid duplicate contribution in same period when EE leaving one employer and join another, a flexible contribution rule is provided for these special periods.

For example:

If EE's actual working days >= 15 in his leaving period, then contribute the SI for the 'Full' month, otherwise no contribution at all. And this rule can be defined differently for each fund type.

Only if the leave day is the last day of current period, then contribute SI. Otherwise, the next employer always covers the contribution for his new hiring EE.

(6)

2.6 Absence processing

Now, you can define specific rule to process each individual absence type.

For example:

Absence Type Deduction Rule

· Authorized Unpaid Leave No deductuion

· Unpaid Leave Deducted unpaid period from the total SI base

· Work Injury Leave Employer burden the cont. for the unpaid part

No matter what the unpaid absence type, always deducted the unpaid periods by using factoring function.

2.7 Other New functions

Ø Retirement age check

Now, you can specify whether to stop the SI contribution when employee exceeds the retirement age.

Ø Total allowance contribution upper limit

Now, you can set an upper limit for total amount of the allowances which need to be included into the SI contribution base.

Ø Housing allowance simulation

Now, for the employees who don't use the accommodation provided by the employer, you can specify whether to simulate the 'Housing allowance', e.g., Basic pay / 6, and add it to the SI contribution base.

Ø Individual allowance upper limit

Now, for the allowances which need to be included in the SI base, you can set the upper limit for individual allowance wage type.

Ø Bonus Distribution

Now, for the bonus paid to the employee in current year, you can specify whether to distribute this bonus in to the SI base from 1.Jan of next year.

(7)

3 Solution Introduction

In this chapter, you will get acquainted with how the new SI legal change is covered by this new solution.

3.1 Basic Customizing

Due to there are lots of big changes in the new social insurance legal change, so in the new solution, we are using a new set of customizing tables to replace the old ones. A new view cluster is provided to customize the contribution rule for each fund type. You can access the customizing by 'VC_t7QA84' in t-code SM34, or by the IMG path:

Payroll Qatar (PY-QA) -> Social Insurance-> Statutory Social Insurance Settings-> Renewed Solution as of SP16-> Define Statutory Social Insurance Contributions

3.1.1 Fund Type Definition

When enter to the initial screen, you will find,m under the root node 'Fund Type', there are also 3 sub-nodes, where you can defined detail SI contribution rule for each fund type.

Select a line in the fund type in the list above, and then move into the detail maintenance screen:

(8)

Header Part

· Start Date and End Date

You can delimit this record by the date period when you need change some customizing, e.g. in a legal change, a new rate need to be setup.

· Country

A fund type need to be associated with a country code, and this is mandatory. When maintaining the fund type for an employee in infotype 3301(Social Insurance Qatar), system will perform a check between employee's nationality and the Country code linked in the fund type.

· Bank Key and Bank Account

In most the cases, the employer has different bank account for each SI fund type. With the bank accounts linked in the fund type, you can retrieve it in your customized reports, or also link the wage types for each GCC country with this account.

(9)

· Currency

Specify the currency unit for the amount used in the fund type definition, e.g. 'Minimum Limit'. When running the payroll calculation, the currency will be exchanged to the local currency, i.e. 'QAR'.

· Main Fund

This is a very important flag. The 'Main Fund ' means the 'Employer's' fund, that is, the main fund is the one in which the employer registered. For example, a company is running its business in Qatar, and it belongs to the private sector. So, the 'GRPA-PVT' should be specified as 'Main fund'. In the same period, the 'Main Fund' should be uniquely among all the fund types.

Additionally, the cross check for 'Minimum/Maximum' limitation will be performed against the 'Main Fund', which will be introduced in the following section.

· Retirement Age Check

This flag indicated whether to perform the retirement age check for the employees covered by this fund type. Once this flag is marked, the retirement age for male and female is mandatory.

When payroll running, system will check employee's age, if it exceeds the retirement age defined, the SI contribution will be stopped.

Contribution Rate

· Employee Rate

This is the SI contribution rate which the employee should contribute.

· Employer Rate

This is the SI contribution rate which the employer should contribute.

· 'Minimum Limit' and 'Variance Contributed By'

The minimum limit indicates the minimum contribution base required by the SI fund.

The 'variance contributed by' indicates when the actual contribution is lower than the minimum limit, who should burden the 'Delta' amount.

As illustrated in chapter '2.1', in most of the cases, the GCC employees should burden both the 'EE and ER' rate for the allowances income. So, let's take some cases to get a clear understanding for the calculation logic.

(10)

Basic Scenario:

· Kuwait Employee works in Qatar

· 'GRPA-PVT' is the main fund (Employer's fund)

· 'PIFSS-PVT' is the employee's native fund. (Employee's Fund) · Employee's Salary:

Basic Salary 600 QAR Allowance 100 QAR · As required by 'PIFSS-PVT',

Share Base 600 QAR (EE Rate 8.5%, ER Rate 10%) EE Burden Base 100 QAR (EE Rate (8.5% + 10%), ER Rate: 0) Minimum Limit 900 QAR

Variance Cont. By 'Employee' Case 1

· Minimum limit of main fund 'GRPG-PVT'(employer's fund) is set as 500 QAR

Step 1: Check the actual 'Total' contribution base against the min. limitation in employee's native fund, and then allocate the 'delta' amount to corresponding base.

1. Actual total base = 600 + 100 = 700.

2. Delta = EE Native Fund Min. Limit - Actual total base = 900 - 700 = 200

3. Variance Cont. By is 'Employee', so Share Base = 600

EE Burden Base = 100 + Delta = 100 + 200 = 300

Step 2: Cross check the 'Basic Salary' against the min. limitation on main fund (Employer's fund).

1. The basic salary is 600, greater than the main fund min. limit 500, so no further calculation needs to do.

2. EE Contribution = Share base * EE Rate + EE Burden Base * (EE Rate + ER Rate) = 600 * 8.5% + 300 * (8.5% + 10%)

ER Contribution = Share Base * ER Rate = 600 * 10% Case 2

Step 1: The same logic as the step 1 in case 1. Share Base = 600

1. The basic salary is 600, less than the main fund min. limitation 700, so the employer has the responsibility to help the employee 'Share' another 100 QAR.

(11)

2. Share Base = 600 + Employer Delta = 600 + 100 = 700 EE Burden Base = 300 - Employer Delta = 300 - 100 = 200 3. EE Contribution = Share base * EE Rate + EE Burden Base * (EE

Rate + ER Rate) = 700 * 8.5% + 200 * (8.5% + 10%) ER Contribution = Share Base * ER Rate = 700 * 10% Case 3

Step 1: The same logic as the step 1 in case 1. Share Base = 600

1. The basic salary is 600, less than the main fund min. limitation 1000, so the employer has the responsibility to help the employee 'Share' another 400 QAR.

2. Because the EE's burden base is just 300, so employer will help EE share the allowance up to 300 QAR, but not 400 QAR

Share Base = 600 + EE's Total Burden Base = 600 + 300 = 900 EE Burden Base = 300 - Employer Delta = 300 - 400 = Reset to 0 3. EE Contribution = Share base * EE Rate + EE Burden Base * (EE

Rate + ER Rate) = 900 * 8.5% + 0 * (8.5% + 10%) ER Contribution = Share Base * ER Rate = 900 * 10% Summary: The calculation logic for the minimum limitation is:

1. Check the Actual total base against employee's native fund, and allocate the delta amount according the customizing 'Variance contributed by' of the fund type.

2. Check the 'Basic Salary' against the minimum limitation of Main Fund (Employer Fund), if basic salary is less than Main Fund min. limitation, then reduce the delta amount from employee's burden base, and add it to the share base, but the delta amount is up to the EE total burden base.

That is, within the employer's responsibility scope, the employer will help the employee to relieve his burden.

(12)

· 'Maximum Limit' and 'Excess Contributed By'

The maximum limit indicates the maximum contribution base required by the SI fund.

The 'Excess Contributed By' indicates when the actual contribution base is greater than the Main Fund (Employer fund) maximum limit, who should burden the 'Delta' amount.

As illustrated in sector '2.1', in most of the cases, the GCC employees should burden both the 'EE and ER' rate for the allowances income. So, let's take some cases to get a clear understanding for the calculation logic.

Basic Scenario:

· Kuwait Employee works in Qatar

· 'GRPA-PVT' is the main fund (Employer's fund)

· 'PIFSS-PVT' is the employee's native fund. (Employee's Fund) · Employee's Salary:

Basic Salary 6000 QAR Allowance 2000 QAR · As required by 'PIFSS-PVT',

Share Base 6000 QAR (EE Rate 8.5%, ER Rate 10%) EE Burden Base 2000 QAR (EE Rate (8.5% + 10%), ER Rate: 0) Maximum Limit 5000 QAR

Excess Cont. By 'Employee' Case 1

· Maximum limit of main fund 'GRPG-PVT'(employer's fund) is set as 8000 QAR

Step 1: Check the actual 'Total' contribution base against the maximum limitation in employee's native fund, if exceeds, reduce the delta amount by the following sequence: first deduct from EE Burden Base, then deduct the Share base.

1. Actual total base = 6000 + 2000 = 8000.

2. Delta = Actual total base - EE Native Fund Max. Limit = 8000 - 5000=3000

3. Firstly, deduct the delta amount from EE Burden base, and then deduct the rest from Share base.

EE Burden Base = 2000 - Delta = 2000 - 3000 = 0 Delta left = 1000

Share Base = 6000 - 1000 = 5000

Step 2: Cross check the 'Basic Salary' against the maximum limitation on main fund (Employer's fund).

1. The basic salary (share base) now is 5000, less than the main fund maximum limitation 8000, so no further calculation needs to do. 2. EE Contribution = Share base * EE Rate + EE Burden Base * (EE

Rate + ER Rate) = 5000 * 8.5% + 0 * (8.5% + 10%) ER Contribution = Share Base * ER Rate = 5000 * 10%

(13)

Case 2

· Maximum limit of main fund 'GRPG-PVT'(employer's fund) is set as 4000 QAR

Step 1: The same check logic as in step 1 of case 1. 1. Actual total base = 6000 + 2000 = 8000.

2. Delta = Actual total base - EE Native Fund Max. Limit = 8000 - 5000=3000

3. Firstly, deduct the delta amount from EE Burden base, and then deduct the rest from Share base.

EE Burden Base = 2000 - Delta = 2000 - 3000 = 0 Delta left = 1000

Share Base = 6000 - 1000 = 5000

Step 2: Cross check the 'Basic Salary' against the maximum limitation on main fund (Employer's fund).

1. The basic salary (share base) now is 5000, still greater than the main fund maximum limitation 4000; so, the delta amount against employer fund is 1000.

2. According to the 'Excess Contributed by' is 'Employee',

So, reduce the delta from Share base, and add it to the EE Burden Base

Share Base = 5000 - Delta = 5000 - 1000 = 4000 EE Burden Base = 0 + Delta = 1000

3. EE Contribution = Share base * EE Rate + EE Burden Base * (EE Rate + ER Rate) = 4000 * 8.5% + 1000 * (8.5% + 10%)

ER Contribution = Share Base * ER Rate = 4000 * 10% Summary: The calculation logic for the maximum limitation is:

1. Check the Actual total base against the maximum limitation in employee's native fund, if exceeds, then deducted the delta amount by the following sequence: Firstly EE Burden Base, then Share Base

2. Check the 'Basic Salary' against the maximum limitation of Main Fund (Employer Fund), if basic salary is still greater than the Main Fund maximum limitation, then reduce the delta amount from the Share base, and add it to the corresponding base by customizing 'Excess contributed by', in most of cases, it is 'Burden by Employee'. 3.

Contribution Base Recalculate Period

· In the new solution, you can specify in which payroll period the contribution base should be recalculated.

(14)

· For the new hired employee, the SI contribution base will always be

calculated in the hiring period, no matter the current payroll period is marked 'Recalculate' or not.

· Once the SI base is created, although there is salary increase during the following periods, the SI base will not be changed until the next period which is marked with 'Recalculate'.

Contribution Method

· Prorated Contribution

If the contribution method is marked as 'Prorated', system will prorate the contribution base to the actual active period, as figured below:

Note: in the new SI solution, you can specify how to handle the 'Absence'

days in many ways, which will be described in the following chapter.In

order to make it simple, in this case we assume the processing method for 'Unpaid Absence' is 'Totally Deducted from Base'.

In the following example, assume the total base is 1000 QAR, so after proration:

Actual SI Base = 1000 * (31.Jan - 25.Jan + 1) / 31

· Full Contribution

If the contribution method is marked as 'Full Contribution', system will always contribute the SI for the whole month.

For the same example above, the actual SI base is keeping 1000 QAR without proration.

(15)

Allowance Contribution Rule

· Simulate Housing Allowance

For some fund types, although the employee doesn't receive a housing

allowance from his employer, but he is using the accommodation provided by employer. So when calculating the SI base, the housing allowance should be simulated by a specific percentage of the basic pay.

For example:

EE is using company's accommodation, but not receiving housing allowance. So, the estimated housing allowance = 2 * Basic Pay / 12.

After you specify the percentage of the basic pay, you should also input the housing allowance wage type, by which the system will retrieve the

contribution rule for this wage type (will be introduced in next chapter 'Allowance Contribution Rule').

· Total Allowance Upper Limit

For some fund types, there is an upper contribution limit for the total amount of the allowances which need to include in the SI Base.

For example:

The total allowances cannot exceed 100% of the basic salary.

3.1.2 Allowance Contribution Rule

After finish the fund type maintenance, you can select the sub-node 'Allowance Contribution Rule' to maintain the allowance contribution rule.

For each fund type, input the allowance wage type here if it needs to be included into the SI contribution base.

Note: in the new SI solution, the Process class 63 + Sepc. 2 will NOT be used to control the allowances anymore.

(16)

Contributed By

The 'Contributed By' option has 4 valid options:

· Employee

It indicates this allowance wage type should be burden by employee himself, i.e. employee should contribute both the 'EE Rate' and 'ER Rate' for this allowance amount.

Technically speaking, this allowance wage type will be included into '/107 - SI EE Cont. Base' when payroll running

· Employer

It indicates this allowance wage type should be burden by employer itself, i.e. employer should contribute both the 'EE Rate' and 'ER Rate' for this allowance amount.

Technically speaking, this allowance wage type will be included into '/108 - SI ER Cont. Base' when payroll running

· Employer and Employee

It indicates this allowance wage type should be shared both by Employee and Employer, i.e. employer should contribute 'EE Rate' on it, and Employer should contribute the 'ER Rate'

Technically speaking, this allowance wage type will be included into '/106 - SI Cont. Share Base' when payroll running

· No Contribution

It indicates this no need to contribute on this allowance. It is usually used when you delimit a record to exclude the contribution of one wage type, but don't want to delete it from the table.

Distribute and Period

The 'Distribute' option is used to control whether to distribute the bonus received in current year to the SI base from Jan. of next year.

For example: 'M230 - Direct Bonus' is marked with distribute with period 12

Employee got a direct bonus 24000 QAR in Dec.2013, in Jan.2014, the base will be re-calculated, so system will check whether there is M230 in employee's payroll result of 2013, if found, then divided the amount by the period 12 (24000 / 12 = 2000 QAR), and then add it into the SI base as of Jan.2014.

(17)

Upper Limit

For some fund types, there is an upper contribution limitation for individual allowance.

For example

For Bahrain employees, the maximum contribution against the social allowance shouldn’t exceed BD 150 (i.e. 21% of social allowance shouldn’t exceed BD 150). So, in order to make it simple, the 'Base' should be input in the 'Upper limit' field, but not the actual contribution, i.e. in the example case, you should input 150 / 21% = 715 BD here.

3.1.3 Absence for Fund Type

After finish the fund type maintenance, you can select the sub-node 'Absence for Fund Type' to maintain the absence deduction rule for each fund type.

Notice: only if the contribution method in the fund type is marked as 'Prorated Contribution', then the 'Absence for Fund Type' node is accessible, otherwise, system will block you with an error message.

General Rule:

· When payroll is calculating the proration factor, only the absence types specified here will be take into account, for others, even it is unpaid absence, but if you didn't customize it here, so it still will be excluded.

· For the absence type customized in this node, only the 'unpaid' part will be taken into account.

For example,

v Work Injury Leave - 50% Paid v EE took 3 days work injury leave

v So, only 1.5 unpaid absence days will be deducted from total working period

(18)

Deduction Covered By:

This option contains 4 options:

· Not Covered

It indictes the unpaid periods of this absence type will be deducted directly from the total period.

For example:

v Employee took 10 days unpaid leave in Apirl

v Basic salary is 1200

v Actual SI base is 1200 * (30 - 10) / 30 = 800

· Employee

It indictes the unpaid periods of this absence type should be covered by employee

For example:

v Employee took 10 days work injury leave in April.

v Basic salary is 1200 QAR (Share Base)

v Allowance is 300 QAR (EE Burden Base)

v Actual Share Base = 1200 * (30 - 10) / 30 = 800

v Actual EE Burden Base = 300 + 1200 * 10 / 30 = 700

· Employer

It indictes the unpaid periods of this absence type should be covered by employer

For example:

v Actual Share Base = 1200 * (30 - 10) / 30 = 800

v Actual EE Burden Base = 300 * (30 - 10) / 30 = 200

v Actual ER Burden Base = 1200 * 10 / 30 + 300 * 10 / 30 = 500

· Employee and Employer

It indictes the unpaid periods of this absence type should be shared by employee and employer

For example:

v Actual EE Burden Base = 300 * (30 -10) / 30= 200

(19)

3.1.4 Contribution Rule during Join or Exit SI

When employee is leaving one company and joins another, in order to avoid duplicate SI contribution for the same period. For each fund you can specify the contribution rule for the hiring/termination period.

Full Contribution Condition

You can specify the minimum days when employee works in your company, then make 'Full' contribution for the period, otherwise no contribution at all.

For example:

v Employee joins your company on 11.Apr

v The contribution rule is setup as figured above

Because the actual working days is 20, then using the 'Full' contribution rule

v For active days, it is the same as regular period, i.e., basic pay is share by EE and ER; allowance is burden by EE (by customizing), since this is 'Full' contribution, so absence will be ignored though it is defined for regular period.

(20)

Active Period:

Share Base = 1200 * 20 / 30 = 800 EE Burden Base = 300 * 20 / 30 = 200

v For inactive days (non-working days), all the base, including share base and EE burden base, should be burden by EE (by customizing).

Inactive Period: Share Base = 0.

EE Burden Base = 300 * 10 / 30 + 1200 * 10 / 30 = 500

v The final contribution base is:

Share Base = Active + Inactive = 800 + 0 = 800 EE Burden Base = 200 + 500 = 700

When Not Meet Full Contribution Condition

When the employee's actual working days is less the minimum limit required by the full contribution rule, then it moves to the other processing rule 'When not meet Full Contribution Condition',

It has 2 valid options:

· No Contribution

In this option, no contribution should be made for the working period.

· Prorated Contribution

In this period, only prorate the total SI base to the actual working days. It is the same proration rule as we illustrated before.

For example as figured below, only the period from 25.Jan to 31.Jan will be prorated.

Join in middle of month and Leave in middle of month

When you customize the special rule for join in MOM and Leave in MOM, for the same fund type, it should be consistent. Please refer to the sample entry for each fund types.

(21)

Employee Employer Employee Employer Employee Employer Employee Employer GRSIA-PVT => 1 EE ER EE ER => 1 N N N N GRSIA-PVT = 30 EE ER EE ER GOSI-PVT => 1 EE + ER N EE ER => 1 N N N N GOSI-PVT = 30 EE + ER N EE ER SIO-PVT => 15 EE + ER N EE ER => 15 EE + ER N EE ER SIO-PVT < 15 N N N N < 15 N N N N GPSSA-PVT=> 1 EE + ER N EE ER => 1 N N N N GPSSA-PVT = 30 EE + ER N EE ER PIFSS-PVT => 1 EE + ER N EE ER => 1 N N N N PIFSS-PVT = 30 EE + ER N EE ER PASI => 1 EE + ER N EE ER => 1 N N N N PASI = 30 EE + ER N EE ER

Fund Type Hiring the SI in MoM Termination in MOM

Days Limit Non-Working Days Working Days Days Limit Non-Working Days Working Days

3.2 Social Insurance Infotype Enhancement

3.2.1 IT3301 - Social Insurance Qatar

In the new SI solution, a new 'Statutory SI Fund' field is used to replace the existing one 'Soc. Ins. Fund Type'.

After you finished the data migration (a utility report is provide to help you do this, and it will be introduced in the following chapter), it is recommended to hide the old fund type field by V_T588M.

(22)

3.2.2 Feature 'QASIF'

The function of this feature is to determine which field for SI fund type should be used in IT3301.

· ‘X’ indicates the fund type of the new solution will be used, and relevant logic and validation will be activated.

· 'Blank' indicates the SI fund type field will still be used, and the new fund type field will be hidden.

3.2.3 Feature 'QASIS'

A new feature is provided to determine the default value when adding a new IT3301 record initially.

In the new feature, the return value is a table, which has 2 lines with the following format:

· Line1: Statutory Social Insurance

Format: A/BB/CCCCCCCCCCCCCCC A Statutory SI Contribution BB Exemption Reason C(15) Statutory Fund Type

· Line2: Private Social Insurance

Format: D/EEEE/FFFFFFFF

D Private insurance contribution EEEE Private Insurance fund

(23)

(24)

3.3 Payroll Enhancement

3.3.1 Wage types used in the new SI solution

1. Full Contribution Wage Types

The 3 WT contains the SI contribution base for the whole period, and will be created during the hiring period or base re-calculation period, and will be post to the next payroll periods until the base re-calculation period.

/111 SI Full Share Base /112 SI Full EE Cont. Base /113 SI Full ER Cont. Base

2. Actual Contribution base Wage types

The 3 actual base wage types will be derived from /111, /112, /113 initially, and then prorate or deduction according to the customizing accordingly

/106 SI Cont. Share Base Derived from /111 /107 SI EE Contribution Base Derived from /112 /108 SI ER Contribution Base Derived from /113 3. Contribution Wage Types for each GCC country

For UAE

/321 GPSSA EE Contr. = /106 * EE Rate + /107 * (EE Rate + ER Rate)

/322 GPSSA ER Contr. = /106 * ER Rate + /108 * (EE Rate + ER Rate)

/323 GPSSA Total = /321 + /322

For Qatar

/341 GRPA EE Contr. = /106 * EE Rate + /107 * (EE Rate + ER Rate)

/342 GRPA ER Contr. = /106 * ER Rate + /108 * (EE Rate + ER Rate)

/343 GRPA Total = /341 + /342

For UAE, ADRPBF

/351 ADRPBF EE Contr. = /106 * EE Rate + /107 * (EE Rate + ER Rate)

/352 ADRPBF ER Contr. = /106 * ER Rate + /108 * (EE Rate + ER Rate)

/353 ADRPBF Total = /351 + /352

For Oman

/361 Oman EE Contr. = /106 * EE Rate + /107 * (EE Rate + ER Rate)

/362 Oman ER Contr. = /106 * ER Rate + /108 * (EE Rate + ER Rate)

/363 Oman Total = /361 + /362

For Saudi

/371 Saudi EE Contr. = /106 * EE Rate + /107 * (EE Rate + ER Rate)

/372 Saudi ER Contr. = /106 * ER Rate + /108 * (EE Rate + ER Rate)

(25)

For Bahrain

/381 Bahrain EE Contr. = /106 * EE Rate + /107 * (EE Rate + ER Rate)

/382 Bahrain ER Contr. = /106 * ER Rate + /108 * (EE Rate + ER Rate)

/383 Bahrain Total = /381 + /382

For Kuwait

/391 Kuwait EE Contr. = /106 * EE Rate + /107 * (EE Rate + ER Rate)

/392 Kuwait ER Contr. = /106 * ER Rate + /108 * (EE Rate + ER Rate)

/393 Kuwait Total = /391 + /392

For Others

/394 None GCC EE Contr. = /106 * EE Rate + /107 * (EE Rate + ER Rate)

/395 None GCC ER Contr. = /106 * ER Rate + /108 * (EE Rate + ER Rate)

/396 None GCC Total Contr. = /394 + /395

Summarized Contribution /261 Total EE SI Contr. /262 Total ER SI Contr.

Not only the Statutory social insurance contribution, but also the private

insurance contribution /311 and /312 will be summarized into /261 and /262 also. PCR 26 is used to cumulate the country SI contribution wage type into the

(26)

3.3.2 Payroll Schema Enhancement

1. Payroll Function 'P3301'

Function 'FUP3301' is enhanced to import new required information as calculation input.

2. New sub-schema 'QAIB' to calculate the SI Base

In order to not impact customer's current solution, a new sub-schema 'QAIB' is provided to determine QA SI applicable earning.

(27)

· The New sub-schema 'QAIB' replaced the old one.

PCR QA10 Replace QA01, to determine whether to re-calculate base in the for-period Sub-schema QAIO Import the original result of for-period

Function QASIF Most of the base re-calculation logic is implemented here PCR QA22 Replace QA02, derive the base from previous period

3. New sub-schema 'QAS0' to calculate the SI Contribution

New sub-schema 'QAS0', replaced the old one 'QASI', is used to calculate the SI contribution.

· The Old sub-schema 'QASI'

(28)

3.4 Special Scenarios Handling

3.4.1 SI Base Adjustment Manually

In some cases, you may have to adjustment the SI base manually.

For example, in March, you find your SI contribution is incorrect, and you want to adjust the SI base and retroactive back to January.

In the new solution, 3 new wage types M397, M398, M399 are provided, similar with M390 in old solution; they are used in following methods:

· M397 Adjust SI Share Earnings

· M398 Adjust SI EE Earnings

· M399 Adjust SI ER Earnings

1. The 3 wage types only can be maintained in IT0015

2. If amount > 0, then retroactive will be triggered for the target period, and the SI base /111, /112 and /113 will be overridden by the amount correspondingly.

· M397 --> /111

· M398 --> /112

· M399 --> /113

3. If amount = 0, the retroactive will be triggered, but the SI base /111, /112 and /113 will be recalculated automatically according to the SI customizing.

3.4.2 Join and terminate in same month

Covered the special rule definition for join/leaving period

3.4.3 Retroactive

SI Base will not re-calculate during the retroactive period calculation, expected to use M397, M398 and M399 to enforce a base re-calculation manually.

3.4.4 Contribution greater than actual income

Payment claim will created depend on the Payroll deduction limit definition.

Function QASIC New SI calculation function, replace 'QASI',

(29)

4 Implementation Guide

In this chapter, you will get acquainted with how to implement the new SI solution. After you apply the SAP support package, you will get all the functions. But there are still some customizing tasks you need to do.

4.1 Common Steps for both New Customer and Upgrade Customer

No matter you are a new customer to implementing the SAP HCM system for the first time, or you have already running your business by SAP HCM system, there are some common customizing steps for you before using this new SI solution.

4.1.1 Fund Type Definition

In the new solution, we are using a set of new tables for the statutory social insurance customizing. So, please customize the entries firstly.

You can access the customizing by 'VC_t7QA84' in t-code SM34, or by the IMG path:

Payroll Qatar (PY-QA) -> Social Insurance-> Statutory Social Insurance Settings-> Renewed Solution as of SP16-> Define Statutory Social Insurance Contributions

· The IMG node 'Solution Delivered via SP00' is the old version of Qatar Social Insurance

· The IMG node 'Solution Delivered via SP16' is the new version of Qatar Social Insurance.

4.1.2 Schema Change

The new payroll function is delivery in the standard schema 'QA00', if you are using your own customize payroll schema, please change it accordingly to use the new payroll function.

(30)

1. In sub-schema 'QAP9 - Import additional payments/deductions', change line #240 'COPY QAPF' to 'COPY QAPB'

(31)

3. The same schema change applied to the Qatar public sector payroll schema 'QAU0'.

· In sub-schema 'QAU1', replace 'QAPF' with 'QAIB'

· In main schema 'QAU0', replace 'QASI' with 'QAS0'

4.2 For New Customer

The New Customer means you are implementing SAP HCM Qatar solution as of SP16, that is, before you running payroll for the first time, the new SI solution has already been installed in your system.

After finished the common steps in chapter '4.1', then continue the following steps:

4.2.1 Active the feature 'QASIF'

IMG Path: Payroll Qatar (PY-QA) -> Social Insurance-> Statutory Social Insurance Settings-> Renewed Solution as of SP16-> Activate Use of New Fund Types

(32)

4.2.2 Active the feature 'QASIS'

IMG Path: Payroll Qatar (PY-QA) -> Social Insurance-> General Settings-> Determine Default Field Values for Infotype 3301(Renewed)

Maintain the default SI value based on your business needs and active the feature. This return value will used as default value when create a new Infotype 3301 record.

4.2.3 Hide the old 'SI Fund Type' field by V_T588M Manually

In order not to impact the live customer, by default, the old 'SI Fund Type' is not hidden. So, it is recommended that you hide it manually by the maintenance view V_T588M, although it will not impact anything if you leave it as it is.

(33)

4.2.4 Maintain Infotype 3301 - Social Insurance Qatar

This is the mandatory information if you need to calculate the SI contribution for employees, and this infotype is also one of the components of the standard hiring action.

4.2.5 Initialize the Contribution Base

Required by the SI legal document, the contribution base will only be calculated in January of each year or employee's hiring period.

In most of the cases, before you implementing the SAP HCM solution, you have already running your business and give the payment to your employees. In other words, each employee has already had a contribution base.

If you are implementing the SAP HCM solution not in January, e.g. in March, so you have to specify the contribution base for each employee manually.

In order to reduce the maintenance efforts, a Migration Utility report is provided to accelerate the work.

You can access the utility reporting program name 'HQAISIM0' in t-code SE38, or by the IMG path:

Payroll Qatar (PY-QA) -> Social Insurance-> Statutory Social Insurance Settings-> Renewed Solution as of SP16-> Migrate Existing Master Data

(34)

1. Reporting Selection Screen

(35)

3. In the tab 'New SI Initialization', input the relevant data as below

· Adjustment Date

This date will be used as the original date in IT0015

· Schema for Payroll Simulation

The payroll schema will be used to simulate a payroll running to calculate the referenced amount for wage type M397, M398, M399.

Notice: in most of cases, system will use the payroll period '01 of Next Year' to simulate the payroll run.

· Exclude Fund in Recalculation Period

For example, you are adjusting the base on 2013.08.13, and one fund type 'Fund A' is defined to recalculate the SI base in August every year. If you marked the check box here, that means, all the employees under 'Fund A' will recalculate the SI base in payroll run for August.2013. So, no needs to specify the SI base manually for these employees.

· Exclude EE Hired in Period

Similarly with previous check box, if you marked this flag, the employee who is hired in August (in the example) will be excluded from this report. Because their SI base will be recalculated in the payroll run for

(36)

· Only Trigger Retroactive

When this checkbox is marked, system will not provide the default

amount for M397, M398, M399, that is, only allow you maintain the wage type M397 with amount '0' in IT0015, so it can trigger the SI base

retroactive calculation in any period you want.

· Specify the WTs for SI Base Adjustment

As introduce before, SAP delivered 3 model wage types, M397, M398 and M399 which need to be maintained in IT0015 to adjust the SI base

manually.

If you are using your own wage types, e.g. '9397', '9398' and '9399', you can also input them on the selection screen. But be making sure your own wage type's processing class 62 is specified correctly.

4. In the tab 'Execution Option, select the execution mode

· Batch Input Session

If you have many employees to need to adjust the SI base, you could use this option to create a batch input session.

· Update Direct (Recommended)

This mode will lead you to online infotype maintenance, by which you will get a visual process of how it works.

· Test Run

(37)

5. ALV Grid

After input the required selection data, press F8 to execute the report, then you will enter to the ALV Grid screen.

System will simulate a payroll run by the period 01 of next year, and retrieve the relevant amount as the reference for each Base.

The 3 field highlighted in yellow is the reference value which will be as the default amount for M397, M398 and M399. And these 3 fields are editable, you can correct the value if it is different from employee's actual SI base.

6. Update

After you corrected amount for the all the employees, then select all the lines in this grid, and press the 'Direct Update' button. (In the example, the 'Directly Update' execution mode is selected)

System will call an online PA30 transaction to let you update the adjustment wage in IT0015 one by one explicitly.

(38)

4.3 For Upgrade Customer

The Upgrade Customer means you have already using SAP HCM Qatar solution to run the payroll for some periods, that is, there are existing SI data used by the Old SI solution in system.

After finished the common steps in chapter '4.1', then continue the following steps:

4.3.1 Step 1: Delimits Records of Infotype 3301

In infotype 3301, there are existing 'SI Fund Type' in the old field. So, in the first step, we need map the old fund type to the new fund type, and delimits the records.

1. In the scenarios section, select 'Migrate From Old SI'

2. In the scenarios section, select 'Migrate From Old SI'

Under the 'Data Migration' tab, input the required parameters.

· Push button: 'Step1: Delimit Records of Infotype 3301'

· Input the delimit date

· System will populate a default mapping relationship between the old fund type table and new fund type table, the bridge is the 'Country' linked in the fund type. You can modify the mapping base on your real data.

3. Execution Option

(39)

4. ALV Grid

After running the reports, all the valid employees will be listed in the ALV grid with old fund type and new fund type.

The new fund type field is editable.

5. Update

After all the lines have been corrected, then select all the lines and press the 'Directly Update' button.

(40)

4.3.2 Step 2: Adjust Contribution Base

After completing the delimiting of step 1, return back the selection screen and push the button 'Step 2: Adjust Contribution Base'

The step 2 is very similar with the 'Base Adjustment for New customer'. Please refer to the detail process in chapter '4.2.3'.