On infotype 0234, there is an employee group override that can be setup for each employee. During payroll processing, this grouping can be used to override the tax rates with user defined rates created in BSI TaxFactory. However, this setup requires a great deal of manual intervention in so far as the grouping must be added to infotype 0234 for each employee that requires the alternative tax rate.  

Another option would be to allow the payroll schema to automatically assign the grouping at the time of the payroll run based on a set of predetermined parameters.  

The following is a high-level explanation of the steps for setting up schema rules to generate group overrides. In this example, an employee group override will be used to differentiate the taxation for worker’s compensation (WC) codes associated with the state of Washington.

Background

A client would like to calculate different tax rates based on the tax company/tax authority/WC code combination. In this case, tax company 123 in the state of Washington with WC code 8810 would get one set of tax rates, while the same setup with WC code of 7133 would get the another set of tax rates as any other WC code.  

Current System Configuration

Impacted tax types:
32 Employer Accident Fund Tax
33 Employer Medical Aid Fund Tax
34 Employer Suplmtal Pension Tx
39 Employment Administration Fund
42 Employee Suplmtal Pension Tx
43 Employee Medical Aid Fund Tax
90 Employer Stay at Work Program
91 Employee Stay at Work Program

BTXRATE table contains the tax types/rates based on the tax company and tax authority. Before any changes take place, all tax company 123 employees in the state of Washington will have the same tax rate calculated regardless of the WC code. During payroll processing, the group code that is passed to BSI TaxFactory for all employees is ‘EG99’.  

Changes Required

Redefine the group code sent to BSI TaxFactory during payroll processing based on the employee’s tax company/tax authority/WC code combination. Use a payroll function to make the above association as well as some schema rule changes to set the group code. Then, update BSI TaxFactory with the new grouping to override the tax rates.

Create Custom Function

This function will be called within the payroll schema. It will identify the tax company/tax authority/WC code combination for each employee and return a value back to the payroll schema. This value will be used to determine the group code that will be passed to BSI TaxFactory.

Table relationships:

Worker’s compensation code and region (state) are tied to the position (T5U28)
Personnel number is linked to the position and to the personnel area via PA0001
Personnel area is associated with the tax company (T5U0P)

Schema Rule Changes

Create a rule that calls the new function and passes the necessary value to the rule for group code determination. This new function must be created via transaction PE04. Additional ABAP coding is required to generate the corresponding return value. The return value would determine which group code to assign, the default code or a new group code. Once the group code is determined, it would be sent over to BSI TaxFactory within the BSI script.

BSI TaxFactory Setup

The last part of the setup would involve updating BSI TaxFactory with the new group code and associated tax types. This can be accomplished under the “Employee Groups” link within TaxFactory. For this example, we will use “ABCD” as the new group code.

Example Override For Tax Type 32

After saving, create additional Group Overrides for WA using the remaining tax types 33, 34, 39, 42, 43, 90, and 91. Multiple overrides can be added to the same group by selecting the “Click here to add a new Override”.

Example Results (Both Positions Reside In Tax Company 123)

Employee ID 22970 in position 30022585:
Table T5U28

Group Code in BSI script

Employee ID 15411 in position 30015050:
Table T5U28

Group Code in BSI script

The group code ABCD results in a tax rate of .088 for tax type 32, while the tax rate for group code EG99 for the same tax type is .086.

So if there is a need within the business to differentiate a tax rate based on a parameter or set of parameters more discerning than the tax company/tax authority level, it is possible to address those needs at runtime within the payroll schema.

ABOUT HR FOCAL POINT

  • When time, accuracy and high-quality support are essential, HR Focal Point's precision approach to SAP HCM solutions is the clear choice. 
  • HR Focal Point has been the SAP HCM expert since 2004 with hundreds of years of combined consulting experience its team.
  • HR Focal Point has the SAP HCM experts that will allow you to achieve your goals on time, on point and on budget, thus maximizing your ROI.
  • HR Focal Point offers a flexible engagement model so you only pay for the services you require, when you require them.
  • As an SAP Services Partner, HR Focal Point is known for delivering high-quality solutions, in support of SAP HCM, that are completed accurately and on schedule.
  • HR Focal Point has partnered with SuccessFactors to develop and deliver innovative Cloud solutions, including Employee Central Payroll, for their clients.

FOR MORE INFORMATION

HR Focal Point
Telephone: +1 855.464.4737
Email: solutions@hrfocalpoint.com

Comment