on 04-13-2015 5:15 AM
Hi,
Our client want to calculate one time tax on variable components. Around 10 variable WT’s are there.
Scenario is whenever employee gets lump sum amount on any of the variable component or components, tax should be deducted on that month itself for whole amount. The system should check the current slab and this value should be added to the current calculation but tax should be deducted on that particular month for that ad hoc amount based on new slab. But it should not disturb the original tax deduction for the year because of adhoc payment.
Please provide a solution on this.
Regards,
Sai
Hi
I will explain my requirement in detail.
When we get any Bonus or variable pay or incentive, then it should add to gross amount and tax should be deducted based on the slab and same month tax should be deducted for that bonus amount.
Tax amount should not distribute to next months (till march).
In SAP if any incentive/Bonus is given then it will add to gross salary and calculate the tax and distribute the amount equally to next months.
But our client requirement is, bonus amount tax should be calculated on the same month and for next months it should not calculate tax on bonus/incentive.
How to map this requirement in SAP
Regards
Sai
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Hi Sai,
You can use the below mentioned links as reference for this -
Tax deduction for one time payments - ERP Human Capital Management - SCN Wiki
Hi Vishwas
Thxs for the above.
Now i have configured one time tax deduction as below. But still it is not working as per expectation .
In the schema I have kept INBTD function as below.
INBTD BON5 SBON X tax on bonus
April month I have run payroll and results are below. Income tax is 1450.
Again I have run offcycle in APR and paid exgratia 1lac. Icome tax deducted is 20600.
Again payroll is run for MAY month , 1066 is the income tax.
Now in offcycle it has compared with slab based on the slab it has deducted the tax.
example 1lac exgratia on that 20% = 20000
and cess 3%=600 and total is 20600.
Apr AND May month same tax should be deducted as per our requirement.but diffrent amount is deducted here.
438970 in apr taxable income and 1lac in offcycle in APR.
in the regular run of May month it is adjusting the slab, ex :
upto 5lac -
sorry continued here
438970 in apr taxable income and 1lac in offcycle in APR.
Acual results should be :
upto 5lac - means 5lac - 438970 = 61030 on 10%=6103
and remaining 38970 on 20% slab should come. = 7794
6103+7794=13897 should have been deducted on offcycle payment.
and in may month it should have beeen the same amount of income tax deducted in APR.
but it is adjusting the amount in may month. and distributing the amount equally to coming months.
Any setting is required to meet our requirement.
HI.
As per Vishwas suggestion this is right solution but if we apply these so in future if we required some components then system will not deduct I tax correct. for example... On Bonus wage type we have to deduct one time tax use BON5, but in future if we required Bonus amount then It will create problem I have configured this in DEV but whole cycle is not working properly there is user dieseline is must.
BMs
Hi,
While the above done configuration is correct,we have to modify another rule Inrt and include your wage types to added to the standard tax code Stdr
The rule works when the person getting the money is already in a tax slab.if the employee is in a non taxable range of salary a rule or enhancement needs to put in to check the same
The irregular payment when made to employee calls the rule inrt in payroll run,checks against the Inbtd rule and stdr tax code and deducts tax accordingly in one month..
Regards
Sandhya
Dear sir ,
Whatever u have stated is correct.But a deduction wage type configured for 15 infotype with irregular payment selected can be used to handle the issue .I have already done this.as a faced a similar issue and it recovers the bonus and reduces tax as well .the matter was posted to sap and this was advised by sap
Regards
Sandhya
Hi Sandya
I have given our client requirement above. They are paying many components in the offcycle payment like bonus, variable pay etc.
In the schema I have kept INBTD function as below for one component. Bonus. i have assigned tax code SBON to my bonus wage type.
INBTD BON5 SBON X tax on bonus
But as explained in my above thread, April month tax is 1450. and Apr I have run off cycle and 100000 amount is paid in off cycle. System is calculating tax of 20600( bonus is added to taxable income and based on that amount, slab is calculated on Bonus, it also includes education cess).
In May month regular salary 1066 income tax is calculated.
But as per our requirement In April and May month regular run tax should be same.(Plz refer my above thread).
1, How do we do it in offcycle run
2, How to do it for all components.
Can you plz give the steps.
Hi Sai,
What I can see is you are processing for the Month of April. Before that can you please check whether any result is there or not because INBTD function will take the tax rate from the previous payroll result and then it applies on the one time payment component.
But if it is a first run, then system will not calculate as there is no previous result so for that you have to use an User Exit Determine Income Tax Rate on Bonus Paid through Off Cycle to determine the rate for One time Tax.
Hope this will help you.
Thanks & Regards
Saroj Hial
Hi Saroj
Thxs for the reply. I understand that first run it will not calculate tax since no previous results, But for other months which has previous results , tax should be calculated as below.
When we get any Bonus or variable pay or incentive in off cycle payment, then it should add to gross amount and tax should be deducted based on the slab(after adding bonus to gross sal) and same month tax should be deducted for that bonus amount.
I have kept INBTD with BON5 as below.
INBTD BON5 SBON X tax on bonus.
Apart from this what else we need to do to calculate the tax as above.
I am not clear of using INRT pcr and STDR tax code.
ex :
may month regular run tax is 1500
Offcycle for June month tax is"x" amount
June month regular run tax is 1500.
Regards
Sai
Hi Sai,
The system will not calculate One time Tax along with regular Tax. If you go inside schema INN1, the function INBTD comes first, then comes INTAX function.
So always INBTD will calculate tax on the one time payment component and generate /460.
Then INTAX function will calculate Tax on the Regular component and then system will be get the tax amount which was calculated under INBTD function and it adds with the /460 amount of the regular tax.
Example: After INBTD Function my /460 = 1000
After INTAX Function /460 = 2000 ( 1000 is coming from INBTD and the other 1000 is from regular tax which got calculated under INTAX).
Hope this will help you.
Thanks & Regards
Saroj Hial
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