Free of Tax GB - Net Pay Allowance

[GirieshM]

Hi All,

We have Implemented free of tax for GB payroll.

The Employer has to pay 512.82 GBP as net pay to the employee as shift allowance and the tax will be bearable by employer. We have configured the Free of tax and it is working fine for employees who are in 20% and 40 % tax for the whole year. But the employees who are moving to the range from 20% - 40% in the tax year only with basic salary it is working fine. But when the annual allowance is entered to the employee then the business feels that the calculation done by SAP is not what expected.

The scenarios are mentioned below:

Annual Bonus is 4000 GBP which is entered in P05/2015.

Allowance Amt: 512.82 GBP for 4 weeks (13 Months).

With Bonus and no allowance:

Period	Gross Pay	Tax	NI	Net1
P1 2015	2000	238.2	166.56	1595.24
P2 2015	2000	238.4	166.56	1595.04
P3 2015	2000	238.2	166.56	1595.24
P4 2015	2000	238.4	166.56	1595.04
P5 2015	6000	1038.2	368.66	4593.14
P6 2015	2000	238.4	166.56	1595.04
P7 2015	2000	238.2	166.56	1595.24
P8 2015	2000	238.4	166.56	1595.04
P9 2015	2000	238.4	166.56	1595.04
P10 2015	2000	238.2	166.56	1595.24
P11 2015	2000	238.4	166.56	1595.04
P12 2015	2000	238.2	166.56	1595.24
P13 2015	2000	238.2	166.56	1595.24

With Bonus and with Net Pay allowance:

Period	Gross Pay	Tax	NI	Net2	Difference Net2 - Net 1
P1 2015	2754.11	389	257.05	2108.06	512.82
P2 2015	2754.11	389.2	257.05	2107.86	512.82
P3 2015	2754.34	389.2	257.08	2108.06	512.82
P4 2015	2754.11	389	257.05	2108.06	513.02
P5 2015	6884.1	1535.64	386.34	4962.12	368.98
P6 2015	3067.75	413.37	294.69	2359.69	764.65
P7 2015	3068.2	413.77	294.74	2359.69	764.45
P8 2015	3051.33	406.97	292.72	2351.64	756.6
P9 2015	2,964.48	372.17	282.3	2,310.01	714.97
P10 2015	2,841.49	322.97	267.54	2,250.98	655.74
P11 2015	2,754.11	329.71	257.05	2,167.35	572.31
P12 2015	2,754.11	389	257.05	2108.06	512.82
P13 2015	2754.11	389.2	257.05	2107.86	512.62

As per the business, both the other scenarios are same other than net allowance: 512.82 GBP, so they expects that each periods they has to get the difference of 512.82 ,ore or less difference in pence. In the difference tab it is acheived for 1st 4 periods and after the bonus has been paid it collapsed. I thought that the bonus may be calculated for 13 or 12 months and SAP is providing it in later periods once it understood it is not regular income. In that case the Net difference for a year should be (512.82 * 13) = 6666.66 but the difference in net pay for yearly between the employees are 7674.62

I have debugged the program but unable to get any hint due to complex calculation.

Can any one help me on this.

With Regards,

Giriesh M

[GirieshM · Accepted solution]

Hi All,

Raised an Oss Call and SAP will not work in this way was the reply.

With Regards,

Giriesh M