SAP PY-ID How to Determine Projection Factor /402 in Payroll Result

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

Definitions

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

Where:

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

Usage

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

Or

Annual Regular Net = (Regular Net Income + Regular Net Income in CRT table from previous period) * Projection factor

Sample Projection Factor Definition

Foot Note

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.

4 Responses to “SAP PY-ID How to Determine Projection Factor /402 in Payroll Result”

  1. Bhushan Says:

    Hi,

    This is really a gr8 work you have done, Do you any knowledge for Indian payroll, if yes then please post in your blog , that will be really helpful

  2. Arif Says:

    Hi Pak Harry,

    Artikel yang bagus. Tapi apa boleh tahu juga bagaimana system menentukan NAMTY dan NAMTD? Atau input / parameter apa yang menentukan NAMTY dan NAMTD?

    Terima kasih.

  3. vir parkash Says:

    Dear

    There is std solution to this, for the cases were termination / resignation are going to be the case. Please maintain N0 in IT0041, system will project the tax for the date which is being maintained under N0 reason.

  4. Ari Says:

    Hello Mas Harry;

    Please correct me if I’m wrong. If we see under FUIDTAX, during the calculation of annual regular net (/414), the system will calculate the amount using the formula below:
    annual regular net = annualizing factor * projection factor * (current regular + regular ytd) + previous regular

    or if we are to use the wage type symbolization, then the formula will look something like this:
    /414 = /401 * /402 * (/412 + /412 ytd) + /4P1

    where /401 is annualizing factor
    /402 projection factor, the formulation is as stated above. It will reset its number of month and current period when the employee is transferred to a different tax office grouping, or turned into 1 if the employee is terminated (but not deceased or left the country).
    /412 current regular income where it gathered all regular incomes as defined so
    /412 ytd (year to date) is the accumulated regular income from the previous periods within the same tax year or tax office grouping period taken from CRT
    /4P1 is the amount of cumulated regular incomes from the previous company or previous tax office grouping period

    What I wanted to ask is, what is the “most correct” projection factor number at the end of period?

    Here’s an example according to my understanding:
    Tugiyel Minal Minul is an employee who worked in Company PT Beleketewek Gunjreng , Tbk. started working in branch A, transferred in May to another branch (B) with different tax office grouping, and transferred again to branch C in July. She is paid 20 Million Rupiahs a month and no changes in remuneration during the transfer

    The calculation will be performed as below:
    Jan  1 * 12/1 * (20 + 0) + 0 = 240
    Feb  1 * 12/2 * (20 + 20) + 0 = 240
    Mar  1 * 12/3 * (20 + 40) + 0 = 240
    Apr  1 * 12/4 * (20 + 60) + 0 = 240

    May transferred to another branch, number of total period would be 8 and previous regular income is 80
    May  1 * 8/1 * (20 + 0) + 80 = 240
    Jun  1 * 8/2 * (20 + 20) + 80 = 240

    July transferred to yet another branch, number of total period would be 6 and previous regular income is 100
    Jul  1 * 6/1 * (20 + 0) + 120 = 240
    Aug  1 * 6/2 * (20 + 20) + 120 = 240
    Sep  1 * 6/3 * (20 + 40) + 120 = 240
    Oct  1 * 6/4 * (20 + 60) + 120 = 240
    Nov  1 * 6/5 * (20 + 80) + 120 = 240
    Dec  1 * 6/6 * (20 + 120) + 120 = 240

    With this rule, the annual regular is stable through the whole year.

    Your advice is highly appreciated🙂

    Regards,
    Ari


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: