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Purpose:

The purpose of this Wiki is to understand how the payroll program determines the tax code to be used for a late payment done after leaving for a leaver employee.

Overview:

To know more about this behavior, we must first review the necessary information, and then know how to reproduce it so that we can understand it.
Employees who are made a leavers can have late payments done after they are leavers.Prior to the implementation of RTI, Feature GLTXC was used to determine the tax code to be used for leavers for any late payments done.For a leaver employee where no P45 form has been issued,incase the return value of this feature was set to blank,the existing infotype 0065 tax code was used, and if this is set to X, then tax code BR/0T was used by the payroll to tax the late payments.
With the implementation of RTI, the feature GLTXC will no longer be used.For any late payment done to the employee, incase the P45 form is not issued to the employee, the existing infotype 0065 tax code and tax basis will be used.For a leaver employee where the P45 form is issued, any late payments done to the employee , the payroll will tax the employee using tax code as 0T and tax basis as w1/m1. 

Solution:

  1. Employee hired in payroll area G1 (RTI active) from 01.04.2013 , with Tax code as 944L and tax basis as Cumulative in Infotype 0065.
  2. Payroll for this employee processed until August 2013, and FPS submitted for August 2013.
  3. Employee now made a leaver from 01.09.2013
    IT0000 overview :
  4. Late Payment is updated thru Infotype 0015 ,after leaving.
  5. Payroll is now processed with schema G000,for the month of September 2013
  6. Payroll with retro back to August 2013, and tax will be calculated using employee existing tax code as P45 is still not issued.
    Existing IT0065 tax code and tax basis :

    ST table in Payroll Log shows the following tax code:
  7. For the same employee ,say now P45 report is run , i.e.RPCP45GNRTI_PBS/RPCP45GNRTI in live mode.
  8. This will have Infotype 0065 updated with the P45 issue date.
  9. Payroll for September 2013 is again processed for this employee using schema G000.
  10. Payroll will retro back to August 2013, and the the tax code and tax basis as calculated in September 2013 ST table for the late payment will be 0T and Week1/Month1.
    ST table in Payroll Log shows the following tax code:
  11. Incase P45 is not issued to the leaver employee and a late payment is done, the system will use the existing IT0065 tax code as 944L and tax basis  Cumulative for calculating tax on the late payment.
  12. Where the P45 is issued to the employee ( i.e.Infotype 0065 updated with P45 issue date) and then a late payment is done, system will use the tax code as 0T and Tax basis as W1/M1
    for calculating tax on the late payment 
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1 Comment

  1. Hi Ramana,

    Currently we see that when we try to do the rehire process from transaction code PA40, SAP in the backend is checking for field P45IND on IT 0065 and see if it has value 'X'. I am assuming that this is a checkbox field but we don't see it on the Infotype 0065 screen. Can we know if this is a new validation that is being added by SAP? In the above article you mentioned that the P45 report updates the IT 0065 with the P45 issue date and we see that is happening but the P45IND field is not being updated with 'X' because of which when the rehire process is done, it is not allowing us to perform and giving an error that "the P45 for the previous employment has not been issued. This must be corrected before re-hire". but when i see IT 0065, i can see the P45 issue date is already filled and when i debugged, it is looking at the field P46IND on IT 0065 for a value 'X'. if this field doesn't have this field, it is throwing this error. 

    Appreciate if you can help.

     

    regards 

    salman