Postings from payroll accounting - usually postings in the form of Expenses to Payables - are not usually subject to value-added tax. Neither the expenses, nor the payables contain input or output tax. When posting payroll results, accounts to which amounts subject to value-added tax are posted as a result of other transactions are not affected.

In a special case, however, you can use Posting to Accounting to create posting runs with restrictions subject to value-added tax

When travel expenses are posted and the reimbursement takes place via payroll accounting, the following operations are performed separately:

• Posting of Travel Expense to Payables for Employees; this transaction is found within the Travel Management programs.
• Reimbursement of the amounts to be paid by payroll accounting and then the value-added tax free posting of Payables for Employees to Wages and Salaries to be Paid.

If travel expenses have been determined by travel cost accounting and they are to be posted in payroll accounting, and not in travel cost accounting, the wage type is coded appropriately. However, no personnel number and no travel number can be entered in Posting to Accounting. For more information, see the R/3 Library under Travel Management.

When posting transactions representing invoices to employees, the following transactions are usually carried out in accordance with the declaration principle:

• Creation of invoices for posting of Claim on Employee to Income/Expense Reduction. This posting run is subject to value-added tax and the transaction takes place in financial accounting.
• Retention of the amounts receivable in payroll accounting with the posting of Personnel Expenses to Claim on Employee within Posting to Accounting.

• Invoices to employee for meals
• Invoices for rents from company-owned apartments
• Invoices for private conversations using a company telephone

If you want to simplify these transactions by grouping them into one transaction and posting them as Personnel expenses to income/expense reduction in Posting to Accounting instead, then proceed in the following way:. You can do this by assigning an account to the corresponding wage types in Financial Accounting. This account is linked to a fixed value-added tax. The value-added tax can then be taken into account directly during the posting run.

When reimbursing amounts paid by the employee, the following transactions are usually carried out in accordance with the declaration principle:

• Receipt of invoice with the subsequent posting (which is subject to value-added tax) from Expenses to Payables to Employees.
• Reimbursement of the amounts by payroll accounting and posting from Payables to Employees to Wages and Salaries Payable in financial accounting. This transaction is not subject to tax.

If you want to simplify these transactions by grouping them into one transaction and posting them as Personnel expenses to income/expense reduction in Posting to Accounting instead, then proceed in the following way:. You can do this by assigning an account to the corresponding wage types in Financial Accounting. This account is linked to a fixed value-added tax. The value-added tax can then be taken into account directly during the posting run.

If you set up the special cases described above in your R/3 System, the following restrictions apply.

• You can only implement these functions in countries where only the information available in payroll accounting is required for value-added tax calculation and posting. For example, this is not available in the USA or Canada since a Jurisdiction Code is required for these types of postings and this is not available in Payroll Accounting.
• You must clarify the procedure described above, for your company and also from the legal side.
• Separate business transactions are grouped together.
• Sometimes, amounts are posted using the revenue principle.
• Incorrect sales tax declarations are also sometimes created.