on 09-26-2012 10:12 AM
Hello experts,
I need valuable support from all,
I am initiating implemantation of SAP HR with payroll for Great britain.
I also did all the related Configuarations related to Payroll and simulate it, its processed successfully,
I have 2 doubts described below:
1 ) Now i am Confused about the Taxation part, because it calculate the tax but didnt know how the system derives it.
when i debug the tax function, it goes to the standred formulas proessing and its too long to understand in debug that how it calculate the tax.
2) One more thing is the the question about the period paramters.
I had configured the weekly period parameters with the payroll area, but am in confustion what is the standred procedure, wether i should configure it as weekly or monthly?
please help..
Thanks in advance
Jagdish
Check Period Parameter time Units in T549R and T549P you will get an idea.
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Jagdish,
You must be aware that Period parameters will be weekly or monthly depending on the requirements of your own organisation i.e how often payroll is run there. It surely will not depend on how tax is calculated or vice versa.
If your employees are weekly paid, then you need to configure period parameters for weekly payroll, and if your employees are paid once a month, then you have to do monthly period parameters.
For help in understanding how tax is calculated, you might visit the relevant pages in hmrc.gov.uk - the self assessment pages might give information on how tax is calculated. The standard function modules will calculate in the same way, it is a bit tedious to go through the entire function by debugging - all you need to know is how hmrc wants it calculated.
Hope this helps.
Hello Jagdish
Please refer to the wiki page for the tax calcuation logic http://wiki.sdn.sap.com/wiki/display/ERPHCM/Tax+Calculation+for+UK+Payroll
Thanks and Kind Regards
Ramana
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Hi Harish & Ramana,
can you please help me with my query in the below link
Hi Ramana,
the link which you have given below gives me some idea but i have a question in it
Tax Calculation for UK Payroll - ERP Human Capital Management - SCN Wiki
Salary of the employee 3000 GBP
Fetching Tax Step Value:
From T511k table, the tax step value is fetched which is 500 GBP
Get tax Code Number:
Example: 100 is tax code number for Tax code 100L
Calculating Tax Free Pay:
Tax free pay = (tax code number)/12
= 83.33 ( i am not able to get this 83.33, 100/12 = 8.33 not 83.33)
Actual Taxable pay
= 3000 – 84.09 ( where did you get this 84.09 is it a typo? should it be 83.33?) if it is 84.09 then how did we get that amount?
= 2916.67 (if we take 84.09 then we will get 2916.67 insted we will get 2915.91)
(3000- 83.33 = 2916.97)
Fetching tax bands:
from table T5G01, tax rate fetched based on paydate, in our example,
Tax calculated
= Actual Taxable Pay * percentage threshold
= 2915 * 20% (i am not sure where did we get the 2915 is it a typo again, if feel it is 2916.97)
= 583 (is it 583.334)
Regards
Rahul
Hi Rahul
The tax free pay will be 1000/12, i.e. 83.33.
Here we deduct this amount for the salary paid to get the taxable pay.
3000-83.33 = 2916.77
Therefore applying the tax percentage on the above taxable pay , the tax paid value should be 583.34.
the wiki document was more illustrative of how the calculation should happen.
hope this helps.
Thanks and Kind Regards
Ramana
Hi Ramana,
Thanks for the info,
i have a query in GB tax calculation
EE was has been hired after the last month payroll run (e.g feb 10) & he has been processed for march payroll run.
so he will be getting march salary & april salary
the NI calculation is fine
but this tax has got deducted more not sure whether it is calculating 40% on it or not he has not produced his P45 yet, his tax code is 1000L m1 - which i am not able to understand what has happened
the above calculation is nto working as expected
please check my post
Regards
Rahul
Hi Ramana,
we completed the last month payroll on 10th itself, the EE was hired on the 12th with the starting date as 09 feb.
he did not get paid anything for feb because he was not in the payroll run at all
now this month we ran payroll for him & the tax for him seems to be more
he is a late starter, but we did not ran him in GRET, we ran him in normal schema
Regards
Rahul
Hello Rahul
Can you send me the screenshots of GTAX (complete as in Input ,processing and Output) as found in the payroll log of the employee along with the infotype 0065 screenshot , for the period where the tax calculations are being checked.
Also do send me the RT which contains /121 as well as /501 , calculated for the employee.
Finally is the calculations done for single employee or ME contract ?
Thanks and Kind Regards
Ramana
Hi Ramana,
i have found the solution
there is no issues at all, the system is calculating the tax correctly, i have verified it with HMRC tax calculator
http://payecalculator.hmrc.gov.uk/PAYE0.aspx
please check my post i will update there
Thanks for your support
Regards
Rahul
any input please?
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