SAP Payroll-Tax calculation during Cross Year Retro:

NOTE on processing Class 71 :

Tax Class 0 and 1 does not have major differences. You can check the tax combo from all the 3 tables or run S_AHR_61018777 - Taxability models/tax types by tax authority report...and filter tax class 0 and 1 to see the difference.

In the standard client you wont see any difference.

PC 71 spec 0 is always for regular taxable wages that are recurring in nature

PC 71 spec 1 is customer specific which can used for any reasons..like to group all the one time payments from recurring or group all wages taxed at supplemental rate or any customer specific taxation which may be little different than regular taxable wages. Then use 01 and change the combo.

SAP Payroll-Tax calculation during Cross Year Retro:

If a retroactive change crosses the year, the payroll driver does not go back and recalculate taxes for the prior year. This is controlled by function UOTX0 within Payroll schema .

 Payroll function UOTX0 is only performed when the check dates of the  in-period and the for-period belong to different calendar years.

 To this end, function UOTX0 extracts from table ORT (Old Results Table) all tax-related  technical wage types - that is, all wage types belonging to the name ranges /4**, /D**, /H** and /N**. The function then adds the tax authorities of the earlier period to the current table TAX, assuming  that these tax authorities are not already found there. Finally, function UOTX0 copies the earlier tax wage types from table ORT to table RT.

 

As delivered, the payroll driver does not allow retroactive taxes to be higher than the taxes withheld in the original period, i.e. a 'cap' is placed on retroactive taxes. This cap could lead to errors when performing a retro calculation where a state change is involved. You can control whether a cap is placed on retroactive taxes in function UTPRI within schema U000.

Cross-quarter retro calculation

When you make a cross-quarter retro calculation, the system identifies and records key data for the run in the Cross-Quarter Retro calculation table. This data is critical for both Tax Reporter and the Payroll Reconciliation Report. Payroll creates entries in this table whenever it detects a cross-quarter retro calculation of payroll results that were already included in a productive Tax Reporter form generation run, as indicated in the Tax Reporter Control Record. Entries are made in the Cross-Quarter Retro calculation table for any retro change that adjusts taxable or tax wage type amounts in the original period.

Other retroactive adjustments not impacting tax reporting are not flagged in this table. Tax Reporter uses the entries in this table to pre-select employees for correction forms, allowing more efficient runtimes during tax form generation

- Suresh Kalimahanthi