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what is the difference between Work Tax and Resident Tax

Former Member
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Hi

I am new to payroll project ,I am bit confused between Resident Tax and Work Tax .

please help or any links or documents would be apprciated .

regards

Krishna

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Answers (1)

Answers (1)

Former Member
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HI Krishna,

The residence tax area is the group of authorities to which an individual employee pays tax, based on his residence

Residence Tax Area details are stored in Infotype 0207.

An employee who works in more than one locality during a tax year, may be subject to taxes in those localities. The Work Tax Area infotype records the amount of time an employee spends in each locality other than their Residence Tax Area (Infotype 0207) throughout the tax period.

Work Tax Area of an employee is stored in Infotype 0208.

Pls refer to the below detailed document on the same.

http://www.sapbrainsonline.com/TUTORIALS/FUNCTIONAL/HR_tutorial.html

Cheers,

Pravs

Former Member
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Let me ask you ask you a question with practical scenario .

Lets say a person by name Robert is working in Denver city ,Colorado state in US ,but lives in Texas,US and His consulting company is also in Texas, he works for a client in Denver city,Colorado .He weekly travels between Texas and Colorado ,on His monthly payslips there is only Federal Withholding and there is no State Withholding (because Texas dont have state tax and his payroll is run in Texas by his company ) ,

Where is he paying his work tax and resident tax ?? Is it involved in Federal Tax (is it like in his case Resident tax + Work Tax = Federal tax ) ,there are other two deductions on his payslip like Social security and Medicare which i understood ,once again my question is where can i see his Residence tax and work tax ? are they added in Federal level tax ?

please reply .

Former Member
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Hi Krishna,

In the case explained above ( A person working in CO and residing in TX ), the person will have different tax areas in 0207 and 0208 resp. Pls don't confuse Federal and State tax with Resident and Worktax. Federal and State are Tax areas.

The above mentioned infotypes will give the info on the work state of the person and residence state on the person.

Let me know if u have any further queries.