As we all may know that WT /402 (Projection Factor) are positioning a very critical in the SAP Indonesia Payroll processing. Especially in calculation of the Income tax (Article 21 – Income Tax). Incorrect understanding about the wage type will lead to the incorrect of overall Income Tax calculation
This wage type is actually used for projecting/annualized the total income in yearly basis. The formulas could be found at PCR IDN3 (Setup Projection Factor for Tax Calculation) in sub Pay Schema IDN0. Generally, the PCR can be read as below:
Rate = NAMTY / NAMTD
NAMTY = Normalized number of active month in current fiscal year
NAMTD = Normalize number of active month until specific date in the current fiscal year
Another definition to make it more simpler can be read as below:
Projection Factor = Total Active Month Period in one Tax Year Calendar /
Period N in On-going Tax Year Calendar
In some of payroll formulas as to calculate Regular Net Income (/414) and to calculate Regular Tax (/422).
Pls find the formulas below :
/414 = (/412 + prev /412 ytd) * /402
Annual Regular Net = (Regular Net Income + Regular Net Income in CRT table from previous period) * Projection factor
Sample Projection Factor Definition
Projection factor is commonly used in both of Regular Payroll Run and Off-Cycle Payroll Run. They’re using the same defintion as in practice.
Special note given for the termination/resignation action in the mid of the year, for the case, the projection factor will always be considered as 1 (one). SAP will calculate as it is falling at the end of tax year calendar, just the same as when we come to end of year, that is December period in normal cases. So at the month of termination/resignation, there’ll be Tax Overpaid and therefore a Tax refund must be delivering for the employee.