The payroll portion of tax computation involves a function LTAX. This function retrieves STD information for the employee via Infotypes 0198 and 0021, and calculates the tax based on normal and other earnings of the employee.

The following actions need to be carried out:

• Infotype 0198 Schedular Tax Deduction must be maintained.
• Set up feature LTAXD via IMG.
• Set up the Tax payee details and employer tax reference number via IMG.

 Maintain Tax-related payroll schemas and rules before running payroll.

The processing steps for STD are:

• Read the data in Infotype 0198 Schedular Tax Deduction.

• Get the values for total tax earnings i.e. normal and other earnings.

• Read the statutory tax rates table.

• Compute the various deductions based on constants stored in the statutory constants table.

• Fill up the tax structure of the payroll results.

Depending on whether the payroll run is Monthly or Annual :

• The monthly tax deduction is calculated and the amount to be submitted to IRB.

• If a monthly payroll was run, CP39 is printed.
• If an annual payroll was run, EA Form / CP159 / PCB2(II) / Summary EA Form are printed.