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Retro tax change

Former Member
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Hi,

Is it really recommended to change tax infotypes retroactively? If we do change (increase or decrease) in the tax infotype how will it affect employee's payroll results.

Mayuresh

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

No Its not recommended, but if you did then system will calculated the tax for the period that has already been deducted and if there is any diffrence then it will include in your current pay result.

Former Member
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Hi Amarnath,

Thanks for the reply. lets say if we change employee not to deduct social security taxes retroactively. then will the system refund social security calculated originally?

Let me know.

Mayuresh

Former Member
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Anyone please.

Former Member
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No, System will not the already paid tax

Former Member
0 Kudos

Hi there,

One thing that you need to remember is that social security tax is a self adjusting tax. It always gets calculated based on the YTD earnings and YTD taxes. So always it reads the TCRT table to get the year to date taxes deducted and year to date taxable earnings before the current period's tax calculation.

Based on this year to date calculation if system encounters that the taxes deducted are more than it should have been (particulary for social security and unemployment), it will refund the tax whether you run retro or not.

But there could be some scenarios where in it can do a refund only during retro such as configuration change to a wagetype for its taxablity retro actively and system does not check the configuration change for retro-active accounting.

Hope this helps

thanks

Baburaj S Avanathan

Answers (0)