This post briefly explains the override functionality between SAP system and BSI Tax Factory and provides an implementation example.
BSI overrides are a very useful tool that allows the tax calculation on US payroll completely customizable. It can simply redefine the way that a tax should be handled to suit business specific needs. It is also a good option for critical situations where the tax calculation is not coming as expected and there is no time for deeper analysis.
BSI Tax Factory calculates the taxes based on the legal definition made by each authority. To elect the correct formula for each scenario BSI evaluates the parameters sent from SAP system through BSI interface (payroll function USTAX). But there are scenarios where the business requires a different calculation, for these cases a useful tool offered by BSI are the Overrides.
You can find extensive information about how to configure the overrides at mybsi.com portal. At SAP system the only configuration required is on BSI interface parameter “GC”. This parameter can be handled using IT0234 (Add. Withh. Info. US). Another way to handle it is through schema. On standard SAP schema for US, this parameter is handled at subschema UTX0, at function UMOD rule UMOT. UMODEEG99 is operation used for it.
On this post, we will see an example of group override and how to configure it at BSI TF and what has to be done at SAP system.
Group Override example
For this example, let's suppose that your business requires that the tax calculation for withholding (Tax type 01) for CA should be calculated with a rate of 20% for a specific group of employees. The solution choose to handle this situation is by creating group overrides at BSI TF and to by customizing the payroll schema.
First at BSI TF we need to create the Employee Groups. AT BSI TF main menu, go at Modeling and Employee Groups and create one (I have created with name "ZGMB" on my test). After it, create a Group Overrides for CA withholding with 20% rate. Please refer to BSI documentation at BSI portal https://www.mybsi.com/ProductHelp/TaxFactory90/TF_CS_User.htm for detailed information regarding this modeling process.
At SAP system create a Z rule copied from UMOT:
On the Z rule created, change the operation UMODEEG99. "EG99" is the default value passed. Change it for the name defined at BSI TF Employee group:
Create a Z schema copied from U000:
Do the same for schema UTX0. Edit this just created subschema replace the rule UMOT with the rule created before. Now, edit the Z main schema pervious created and replace UTX0 by the new subschema created.
Execute your payroll with the new schema created. The result should be something like the following (USTAX log):
The implementation of this solution is relatively easy and it is good to have a scenario like this set as a possible workaround. It is relevant to point again that the calculation made by BSI TF will be in accordance with authorities' legislation, therefore this solution would be addressed to exceptional business requirements cases or situations.