Year-End Adjustment Recalculation
The function enables you to recalculate the YEA results if an employee’s master data is changed after running the year-end adjustment (YEA).
Examples of changes to employee’s master data after the YEA are when an employee gets married, or has a baby at the end of the year.
YEA recalculation consists of the following processing scenarios:
Repeat YEA (Up to Jan 31)
January 31 is the final due date of submission of statutory forms. After you performed YEA, if an employee has the following changes that cause a difference in annual income tax amount before you submit the tax related statutory forms, you can perform this process to correct the YEA result for the employee.
For example,
The employee gets married after YEA is performed.
The employee has a baby after YEA is performed.
The employee pays a life insurance premium amount after YEA is performed
The employee submits a housing deduction form after YEA is performed.
For more information, see Repeat Year-End Adjustment (Up to Jan 31).
Repeat YEA (After Jan 31)
After you submitted the related statutory forms to the tax office, if an employee has the following situations, you can perform this process to correct the YEA result for the employee. This process can be performed only when a tax collection happens. For a tax refund, the employee must go to tax office to file a tax refund.
For example,
A claim for a spouse deduction was not correct because the spouse had a higher income than the limitation amount.
A claim for a spouse special deduction was not correct because the spouse had a higher income than the limitation amount.
A claim for a dependent deduction was not correct because the employee’s income was higher than the limitation amount.
The employee did not submit the life insurance declaration form by January 31, although the company included the life insurance deduction in the YEA on the assumption that this form would be submitted by then.
For more information, see Repeat Year-End Adjustment (After Jan 31).
YEA Correction of Dependents’ Data
Tax offices or other authorities notifies the employer of a mistake in a spouse's income, dependent status, dependent's income, and similar around October, therefore, you perform the process for the employee to correct the YEA results for the target years. This process can be performed only when a tax collection happens. For a tax refund, the employee must go to tax office to file a tax refund. You can perform the process up the past three years in the following situations.
A claim for a spouse deduction was not correct because the spouse had a higher income than the limitation amount.
A claim for a spouse special deduction was not correct because the spouse had a higher income than the limitation amount.
A claim for a dependent deduction was not correct because the employee’s income was higher than the limitation amount.
For more information, see Year-End Adjustment Correction of Dependents' Data.
In summary, the main differences between them are below:
Category |
Timing |
Trigger Event |
Payroll Reason |
Result |
|---|---|---|---|---|
Repeat YEA (up to Jan 31) |
On or before January 31 of the following year after YEA was performed |
Employee (or clerk) found out some data was not correct in the YEA calculation (such as dependent status). |
0015 |
The employer pays the tax refund or deducts the tax collection amount in the next payroll. |
Repeat YEA (after Jan 31) |
After January 31 of the following year after YEA was performed |
Employee (or clerk) found out some data was not correct in the YEA calculation (such as dependent status). |
0016 |
The employer deducts the tax collection amount in the next payroll. |
YEA correction of dependents’ data |
October – November of current year |
Tax office or other authorities requests to do YEA correction of dependents’ data for certain employees. |
0017 |
The employer deducts the tax collection amount in the next payroll. |
Features
YEA recalculation provides the following functions to support various business processes:
YEA recalculation solution uses the correction payroll to calculate the YEA results retroactively. This enables you to perform YEA recalculation at any time regardless of whether the next payroll has already been run or not.
YEA calculation results migrate from cluster YJ to cluster RJ, which enables you to manage YEA history data.
The system uses the difference of the annual income tax amount (wage type /432) between the previous YEA result and the current YEA result to judge whether there is a tax refund or a tax collection.
You perform repeat YEA (after Jan 31) and YEA correction of dependents’ data if there is a tax collection. The system updates YEA result with the newly calculated YEA result in the original period and deducts the tax collection amount in the next regular payroll of the correction payroll. If there is a tax refund, a message appears to notify you the employee is not subject to repeat YEA (after Jan 31) or YEA correction of dependents’ data and the system terminates the processing automatically.
Output
After recalculation of YEA, the following reports process YEA results from the cluster RJ: