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.
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’.
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.
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:
Group Code in BSI script
Employee ID 15411 in position 30015050:
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.
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