Year End Adjustment (SAP Library - Year End Adjustment)

Year End Adjustment

Purpose

The Year End Adjustment (YEA) is a set of business processes to equalize the total amount of withholding income tax withheld in a year from payments to an employee, and an employee's tax liability to be retained from the total of those payments. The Year End Adjustment should be reflected in the last salary payment to an employee in a year.

The Year End Adjustment component of SAP System comprises three types of Year End Adjustment processing scenarios to support your company's payroll routine. This component also includes functions to issue legal forms and statements.

Implementation Considerations

You can select only one processing scenario for Year End Adjustment that fits to your company's annual payroll routine from the following:

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Pattern 1: Process Year End Adjustment in parallel with Monthly Payroll

Pattern 2: Process Year End Adjustment in parallel with Shoyo Payroll

Pattern 3: Process Provisional Year End Adjustment in parallel with Shoyo Payroll, and run YEA in parallel with subsequent Monthly Payroll.

Note

Year End Adjustment Correction is executable after every type of Year End Adjustment.

You can specify one processing scenario for Year End Adjustment in the customizing set up. For more information, see Set Up Processing Scenario of Y.E.A. Calculation in the Implementation Guide (IMG) of Payroll Japan.

Integration

Year End Adjustment process is integrated with monthly payroll and Shoyo payroll calculation and cannot be executed independently. This process creates monthly payroll result, Shoyo payroll result and Year End Adjustment result and store them in the special data base. Year End Adjustment Correction process updates only Year End Adjustment result data base. This Year End Adjustment result is used as basis data for issuing legal forms and statements such as Wage Ledger (Gensen Chousyu-Bo/Chingin Dai-Cyo), Tax Statements for Year End Adjustment and Payment Report for Year End Adjustment (Soukatsu-Hyo).

Year End Adjustment is also executed for retirees (retirement liquidation) and non-resident employees. Please refer to Retirement and Non-resident Payroll sections for more information about functionality's and processes.

Constraints

SAP System does not support Year End Adjustment process which is run in parallel with Non-Periodical Shoyo nor executed apart from any payroll calculation except Year End Adjustment Correction.

This section consists the following:

Functions of Year End Adjustment

This sub-section describes each functions that SAP System offers, to process various business processes for Year End Adjustment.

Processing Scenarios of Year End Adjustment

This sub-section describes how Year End Adjustment processes are organized into business scenarios.