Previously, as I’ve been explaining in January Period, in SAP Payroll Processing, there are so many things that should be aware of. Such as Retro-Active calculation cross the year, it may lead to the incorrect tax (PPh21) calculation (see related posting) . Another issue that has been raised is having Off-cycle pay run before Regular Pay Run take in place, also happen in the beginning of the tax year (January Period). FYI, This off-cycle pay run is close relating to the THR/Bonus payment.
By referring to the issue, the end result will be a small amount of Tax deduction (pph21) in off-cycle pay result while then the rest would be brought forward into the next Regular Pay Run, in the same period, to recalculate the actual Tax deduction. The affect is that the employee salary in the next regular pay run could be less and/or becoming negative cause by the tax deduction.
It is not a kind of SAP bugs, but more to the SAP logic in calculating the income tax when there’s a case that having Off-cycle pay run before regular pay run in beginning of tax year.
But in the overall income tax calculation in a year SAP is quite smart to calculate it to avoid the case of overpaid and/or underpaid of tax.
The related symptom just like the issue as above is about there’s a kind of personal transfer in/out among the personal area (tax office group) and then having also the off-cycle pay run before the regular pay run take in place. (see OSS Note: 864077)
The SAP Logic behind the screen are:
- THR/Bonus wages treated as an Irregular Net Income and also There is no previous Net Income found (the CRT table is totally in initial balance)
/4P2 : Previous irregular net wage type
/4P3 : Previous regular tax wage type
/4P4 : Previous irregular tax wage type
Since it is not a SAP bug then below are the steps that has to be done by the Company:
1.) Socialize the case to the employee.About less tax deduction in off-cycle pay run (THR/Bonus) and more higher tax deduction in the next regular pay run.
SAP customers (read: the company side) must be aware of this issue since it is related to the employee remunerations package on the related period. It must be well socialize to related employee, to avoid such a complaint in the next.
2.) Change the payroll running orders, prioritize first the regular pay run then following by the Off-cycle Pay run. But this would be very tough for the payroll team, since they have had their own pay processing schedule on January Period, including the yearly reporting (tax, jamsostek and so on). The tricky option is that to make earlier the pay cut-off for running regular pay run at first, even though the transactions are not closed yet (overtime, variable allowance and so on). And then running the off-cycle one, this is in order to distribute the tax amount in between.
The remuneration that has not been paid to the employee in January period could be calculated as an adjustment in February Period.