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Process documentation PY-TW Income Tax on Non-Salary Locate the document in its SAP Library structure

Purpose

Income from salaries and wages is earned for performing duties or work. Non-salary income refers to income earned by employees rendering other services, for example, income from commission.

The non-salary income tax rate is different for resident and non-resident employees.

Prerequisites

The Tax ID Type field determines the nationality of an employee. For a non-resident employee, the Tax Category field is verified to see if the employee‘s stay is more or less than 183 days. This information is required to calculate the non-salary income tax of an employee.

We recommend that you enter data in Create Recur. Payments/Deds infotype (0014) or Create Additional Payment infotype (0015).

This table is used for different income category tax rates for local and foreign employees.

Process Flow (Example: Commission)

The following process describes how commission is read and stored for tax calculation.

  1. The amount of commission is read from data created in infotype and cumulated to wage type /111 (Commission).
  2. This amount is compared to the taxable rates set in Wage Type Dependent Tax Rate table (T7TW2E).
  3. If the total amount is less than the minimum tax amount (set in Wage Type Dependent Tax Rate table (T7TW2E)), the employee does not need to pay tax. If the total amount is more than the minimum tax amount, the taxable amount is calculated and stored in wage type /411 (Commission-tax).
  4. Run payroll driver to see the results.

 

 

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