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Expats receive only a monthly allowance that is grossed up. In period 01 2012 the value of /F51 FOT /501 calculated in the GRSUP function, matches the value of /501 after the normal tax calculation in function GTAX. From period 02 onwards these values differ due to tax refund in step 0 of the GRSUP function. This leads to incorrect gross amount (overpayment) being paid to the employees.

Following is the solution for the above issue:

Please refer to SAP note number Note number: 604668 released in 2003 , which determines how to use a tax refund during the gross up process and delivered a new wage type M360
which allows the gross up to be processed but does not include the tax refund created.

Therefore to achieve the desired results i.e. not to include tax refund, please use the Model wagetype M360 and not M350.

The above scenario when recreated in standard system with the model wagetype M360, and looked in the iterations, the tax refund no longer appears and the values are correct.

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