Payroll Archive - HCM SSC GmbH

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Overtime Credit Upon Termination: Why It’s Worth Taking a Look at Your Pay Stubs Right Now

28. September 2026

The settlement of time credits is not a new topic in SAP HCM. Nevertheless, it’s worth taking a closer look at it again in 2026.

In fact, as recently as August 2026, SAP released another fix in Note 3758108. This fix addresses a duplicate gross BG amount when using the technical wage type /3W4. Retroactive calculations are planned for affected cases.
[Source: SAP Note 3758108 / Support Package dated August 13, 2026]

At the same time, Section 23d of SGB IV was amended at the end of 2025. Since then, when settling accrued working time credits, the last pay period in which contribution-subject earnings were earned has been explicitly relevant—even if that period falls in the previous yea^r.1

So the question is no longer simply: Have we implemented Section 23d of SGB IV? Rather: Does our SAP payroll system correctly account for special cases—such as long periods of sick pay prior to settlement—in accordance with contribution and reporting regulations?

When does a working-time credit become subject to settlement?

Upon termination of employment, there are still 40, 60, or 100 “Plus” hours remaining in the working-time account. It is no longer possible to take time off in lieu. The credit is paid out. So far, that makes sense.

However, a case from the Federal Labor Court shows that even determining whether a claim actually exists is not always quite so simple:

When she left the company, an employee still had 67.10 hours remaining in her work-time account. Although she had previously been irrevocably released from her duties, these hours were not automatically considered to have been offset. The Federal Labor Court (BAG) awarded her 1,317.28 euros before tax for the remaining balance.

The key point from a practical standpoint: A leave of absence does not automatically reduce a work-time account. It must be clear that the leave of absence is intended specifically for this purpose.

[Source: BAG, 5 AZR 578/18]

Once it is determined that the credit balance will be paid out, the case is forwarded to Payroll. And that is where Section 23d of SGB IV comes into play.

What does Section 23d of SGB IV provide for?

Effective December 24, 2025, paid wage credits derived from working time credits will be allocated to the most recent pay period in which the employee received current, contributory wages.

This period may also fall within a previous calendar year.

This is particularly relevant when some time has passed between the last regular payment and the settlement.

A Real-World Example

The German Pension Insurance Fund itself uses the following case as an example in 2026:

An employee receives 4,500 euros in monthly pay. Continued pay during sick leave ends on May 15, 2025. Thereafter, he will receive sick pay until October 29, 2026. His employment ends the following day.

The following will be settled:
3,000 euros in vacation entitlement

4,000 euros in accrued working time
There are thus more than 17 months between the last current contributory pay period (May 2025) and the settlement (October 2026).
This illustrates why Section 23d is relevant: For the working time credit, one must look back to the last pay period in which current, contributory wages were recorded. What matters is not the month of payment, but this last “currently recorded” period—even if it falls in the previous year.²

Overtime credit or vacation pay? An important distinction.

In the example of the German Pension Insurance, vacation pay and overtime credit are paid out at the same time. However, for contribution purposes, they are not simply treated the same.

Work Time Credit

Eligibility	What is paid out?	Classification
	Time already worked and recorded in the work time account	Section 23d of SGB IV may be relevant
Vacation Pay	Vacation Entitlement No Longer Available	Separate Treatment for Social Security Contribution Purposes
Value Credit	Credit accumulated over the long term, such as for future leave of absence	Separate statutory framework

[Sources: § 23d SGB IV; DRV, summa summarum 2/2026]
Especially when several payments are due at the time of withdrawal, it should therefore be clear from the outset which entitlement corresponds to which amount.

But what does this mean for SAP HCM?

SAP has made several adjustments to the processing of time credits in recent years.
In 2025, SAP Note 3604584 introduced, among other things, the technical wage types /3W4 and /3WD for the accrual principle. The subapplication SVZ0 has been active by default since January 1, 2026. 4, 5
And even in 2026, the issue was not yet resolved: SAP Note 3758108 corrected the aforementioned double gross amount for the Social Insurance Fund (BG) in connection with /3W4.6
This is a good opportunity to evaluate your own implementation based on more than just a standard termination.

For SAP Professionals

Of particular interest are cases in which the last month with current contributory earnings was quite some time ago or even occurred in the previous year.

Even automatically generated settlements deserve closer scrutiny. What matters is not only whether the entitlement is recorded correctly, but also how it is subsequently processed by time tracking and payroll.

Which SAP corrections and follow-up activities are relevant depends on the specific system version and the actual implementation.

How is the settlement of accrued time recorded in SAP?

One option in the standard SAP system is Infotype 0416, “Time Quota Settlements.”

Any remaining time entitlements can be compensated financially. SAP cites, for example, vacation or time off in lieu of overtime. Depending on the process, different compensation rules can be defined.7

In practice, based on our experience, there is no single approach. Companies use different time accounts, pay types, and, in some cases, customer-specific processes.

That is why the question “Do we use IT0416?” is not sufficient for an assessment—a more relevant question is: What happens to the settlement in our payroll afterward?

Three Cases We Would Examine More Closely

1. Extended Receipt of Sick Pay Prior to Settlement

The last month in which contributory earnings were earned may have been quite some time ago. The German Pension Insurance addresses precisely this scenario in its 2026 publication.

2. The Relevant Payroll Month Is in the Previous Year

A change of year does not reset the allocation. Section 23d expressly permits allocation to a payroll period outside the current calendar year.

3. The support package has been installed

This alone does not answer the question of whether all necessary follow-up activities have been completed. SAP Note 3758108, for example, specifies that retroactive calculations must be performed for affected employees.

The third point, in particular, is easily overlooked in everyday life. The system is technically up to date. Nevertheless, there may still be work to be done.

What should the payroll department check in such a case?

A few questions can help quickly identify whether an audit is necessary:

What is actually being paid out: accrued working time, vacation, or another type of entitlement?
When was the last time regular, contributory wages were paid?
Was there sick pay or another extended absence prior to the settlement?
Does the relevant period possibly fall within the previous year?
How is the settlement generated in your own SAP system?
Have the latest SAP updates been applied, and have the corresponding follow-up activities been taken into account?

Anyone who cannot clearly answer these questions in a specific case should take a closer look at it. Especially when there is a lack of time or specialized SAP expertise in day-to-day operations, we provide support with our Business Payroll Service even directly in payroll processing—from individual tasks and follow-up activities all the way to complete payroll processing.

By the way: We’re not talking about a minor issue here

As of the end of 2023, there were a total of 473 million surplus hours in German short-time work accounts. Employees with short-time work accounts had saved an average of just over 30 hours^.8

The figures show the role that working time accounts play in practice. This makes accurate payroll processing all the more important when employees leave the company with a positive time balance. Especially in cases involving longer breaks before payment or an allocation that spans the turn of the year, it’s worth taking a close look at how this is handled in SAP HCM.

When Is a System Check Worth It?

Section 23d of SGB IV is not new. Nevertheless, a lot has changed since its introduction: The statutory provision was amended at the end of 2025, and SAP made further technical adjustments in 2026.

Anyone settling accrued work time upon termination should therefore pay particular attention to special cases—such as long periods of sick leave, suspensions of employment, or settlements made months after the last regular paycheck.

And not just when something stands out during payroll processing, but before errors in contributions and reporting occur.

Questions about the settlement of time credits in SAP HCM?

Are you unsure whether Section 23d of SGB IV is correctly implemented in your system? Or do you have a specific payroll scenario—such as termination, leave of absence, or extended periods of sick leave—where the allocation raises questions?

Then feel free to contact us. We’ll help you properly classify the case both from a technical standpoint and within SAP HCM, review the contribution and reporting assignments, and determine whether adjustments are needed in your system—before any retroactive calculations are made.

Sources

[1] Section 23d of Book IV of the Social Code (SGB IV): Settlement of Derived Remuneration Credits, current version effective as of December 24, 2025
[2] German Pension Insurance: summa summarum, Issue 2/2026
[3] Federal Labor Court: Judgment of November 20, 2019, Case No. 5 AZR 578/18
[4] SAP Note 3604584: Settlement of Work Time Credits, /3W4 and /3WD
[5] SAP Note 3643989: Settlement of Working Time Credits (Section 23d of SGB IV), Problems with Terminations
[6] SAP Note 3758108: Duplicate gross social insurance contribution when using wage type /3W4
[7] SAP Help Portal: Time Allowance Settlements (Infotype 0416)
[8] IAB Brief Report 12/2025: Increasing Flexibility in Working Hours: Record High of 473 Million Hours in Short-Time Work Accounts

Note: This article is intended to provide general technical information and does not constitute legal or tax advice. The content presented is based on the legal and SAP status known at the time of publication. When assessing a specific individual case, the relevant legal framework and the individual system status must be taken into account.

ERiC Release 44 – Action Required in Your SAP System

11. June 2026

With a technical change that may seem insignificant at first glance, ERiC Release 44 could become a problem for companies that use SAP for payroll processing—unless they take action in time.

What is ERiC?

ERiC stands for “ELSTER Rich Client” and is a software library developed by the German tax administration and made available free of charge to all software vendors. It is integrated into both commercial and public tax and payroll accounting programs—anywhere tax data is transmitted digitally to the tax authorities.
Here’s exactly what ERiC does: It checks the tax data for plausibility, compresses and encrypts it, and securely transmits it to the tax authority’s receiving servers. If the transmission is successful, ERiC can also generate a PDF confirmation.

The scale of this is remarkable: Over 100 million tax returns are filed via ERiC each year. The legal requirements for the library’s further development are correspondingly high—which explains why every release is carefully prepared.

What’s new in the latest ERiC Release 44?

Starting with ERiC Release 44, only Version 32 is permitted for retrieving data from the income tax statement (LStB) and the ELStAM. Version 31, which was used previously, is therefore no longer supported. This means that anyone who installs the update to ERiC Release 44 without first implementing the necessary SAP customizations risks error messages and disruptions in ELSTER communication.

Why is this release even coming out?

ERiC Release 44 is intentionally designed as a preparatory release only. It lays the technical foundation for ERiC Release 45, which will introduce the business changes for the 2026/2027 year-end. For the first time, SAP has consistently separated technical and business changes—a wise decision to ease the burden on the already time-sensitive year-end transition. The downside: This now creates an additional step that must not be overlooked.

What exactly needs to be done?

SAP is expected to provide the necessary adjustments, which must be imported into the system. These adjustments ensure that the system automatically uses the correct pickup version based on the ERiC version in use.
Important: These adjustments should be implemented before updating to ERiC Release 44. This is already possible—even if ERiC Release 43 is currently in use.

SAP plans to release ERiC Release 44 between mid-June and July 2026.

Our Conclusion

Anyone involved in SAP payroll processing—and who therefore relies on ELSTER functionality—should keep an eye on this release. It’s not a major update—but it’s one that could lead to unpleasant surprises if you’re not prepared.

Contact us

Are you unsure whether your system is affected, or would you like to entrust the implementation to professionals? Contact us—we have in-depth knowledge of SAP HCM and can guide you through exactly these kinds of customizations.

SOKA-BAU notifications in SAP HCM

3. March 2026

SOKA-BAU Reports in SAP HCM: Why a Clean System Configuration will be more important than ever in 2026

Since July 1, 2025, new contribution rates apply in the construction industry’s social fund procedure – and this is not the only change that construction companies should address in their SAP HCM configuration.
The total contribution is composed of the portion for the ULAK (Vacation and Wage Compensation Fund of the Construction Industry), which secures the vacation entitlement of all construction workers across the industry, the contribution for the ZVK (Supplementary Pension Fund of the Construction Sector), which functions as the occupational pension scheme for the industry, as well as a portion for vocational training in the trade sector.

For companies in the West, the total contribution currently amounts to 20.4% of the gross payroll – divided into 14.5% for the ULAK, 2.1% for vocational training, and 3.8% for the ZVK.

All three components fall under the umbrella of SOKA-BAU – the Social Fund for the Construction Industry – and must be reported and paid correctly on a monthly basis. For SAP HCM systems that process construction payroll, this means: Anyone who has not actively updated these rates has been calculating with outdated values for months. The consequence is incorrect SOKA-BAU reports – and, in the worst case, additional claims that only come to light during an audit.

What has changed with the new VTV – and what this means technically

The VTV – the collective agreement on the social security fund procedure in the construction industry – regulates who is liable to pay contributions, how contributions are calculated, and what reporting obligations apply. In addition to adjustments to contribution rates, the revised VTV contains other relevant changes: Apprentices will now be required to report their granted leave on an ongoing basis – no longer just during their final year of training. Furthermore, printed certificates will be gradually replaced by digital submissions via the SOKA-BAU portal.

Both points have a direct technical implication in SAP HCM. The new ongoing leave notification requirement for trainees necessitates a review of the existing payroll logic and the maintenance of infotypes for trainees. Those who have only represented this in the apprenticeship year so far have had a structural gap in the system since July 2025 – without SAP automatically issuing a warning.

The transition to digital certificates seems organizational, but it is also a signal: the SOKA-BAU process is becoming more data-driven. Companies that still operate with manual corrections and maintenance outside of SAP are increasingly coming under pressure.

Construction wages outside of SAP HCM – an underestimated risk

Many construction companies already have SAP in productive use – typically in FI/CO or in logistics. Payroll configuration for construction wages, on the other hand, is often handled separately: through external service providers, standard software, or an SAP HCM installation that has not been actively maintained for years.

This creates a characteristic risk profile: the system structure exists, but the construction wage–specific configuration levels are outdated, incomplete, or were never fully set up. New tariff changes, such as the VTV adjustments in July 2025, are then not systematically integrated into the system, but at best manually compensated – with all the potential sources of error that entails.

Check in advance: Which infotypes must be reviewed before the SOKA-BAU reporting run?
Here is the checklist:

Typical FI Posting Errors with Seasonal Employees – Three Patterns That Keep Reoccurring

The construction industry relies on seasonal work. Short, recurring employment relationships are not an exception, but the standard model. This is precisely what makes seasonal workers the largest source of errors in the SOKA-BAU process – both on the HR side and in financial accounting (FI).

1Recalculation without another reporting run.

If a seasonal worker is subsequently recorded correctly in the system, SAP triggers a retroactive payroll calculation. However, the corrected gross wage values are only correctly included in the SOKA-BAU report if the respective period is still open and the export run is explicitly initiated again. In practice, this step is regularly omitted.

2. Differences between booked and reported contribution.

Liabilities to SOKA-BAU are recorded through payroll accounting in financial accounting. In the case of mid-year entries, exits, and status changes, discrepancies arise between the amount posted in SAP and the value actually reported to SOKA-BAU – often caused by infotype gaps that distort the assessment basis. These differences cannot be identified before the reporting run without coordination between HR and FI.

3. Missing or outdated symbol account assignment.

If SOKA-BAU-specific wage types are not correctly mapped to general ledger accounts, contributions end up in the wrong accounts. In the HR area, this often goes unnoticed for months – in financial accounting, it becomes immediately apparent during the next account reconciliation or audit.

What the current VTV changes specifically mean for your SAP configuration

The contribution rate changes as of July 1, 2025, and the new reporting obligations for trainees have been in effect for months – but SAP has not adopted them automatically. Therefore, anyone who has not actively adjusted the configuration since then is still calculating with outdated values today.

Specifically, this means:
The new contribution rates for ULAK, ZVK, and the winter employment levy must already be maintained in the relevant wage types and calculation rules. Table T511K for levy-related calculation figures must contain the values valid for 2026 – not those of the previous year. The payroll logic for apprentices must reflect the ongoing vacation reporting requirement, not just the reporting in the apprentice year. Furthermore, the FI-side posting logic must be aligned with the changed rates to ensure that no hidden discrepancies have accumulated since July 2025.

Those who review these points now can correct errors before they come to light during an audit. Those who wait increase the need for corrections with each additional billing month.

What you should take with you

The combination of new contribution rates, changed reporting obligations, and an often historically developed SAP configuration makes the SOKA-BAU procedure 2026 a genuine litmus test for the quality of construction payroll accounting.

Anyone who maps construction wages in SAP HCM needs to understand what has changed in the VTV and have the system expertise to implement these changes at the correct points in the customizing. Only when both work together in a continuous process are SOKA-BAU reports sustainably correct – and thus also audit-proof.

Do you have questions about the current SOKA-BAU configuration in your SAP HCM system? Or would you like to verify whether your construction payroll for 2026 is correctly set up? Please contact us.