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Check Payroll Constants

In most countries, the law stipulates that imputed income gained by an employee from a company loan is liable to tax. Imputed income arises because the interest rate on a company loan is lower than the market interest rate. The market interest rate is defined in law by the reference interest rate. In this step, you can adjust the reference interest rate in your system in line with legal changes.

Imputed income from minimal loans is not generally liable for tax. The upper limit of what constitutes a minimal loan can also be changed in law. You can check and adjust this limit in the second part of this step.

Example

Standard constants for loan processing:

Germany

REFIN Reference interest rate (6.00% at Oct 1, 1999)

LZFGR Interest free limit
STFBI Maximum tax-exempt amount (old loan)

Austria

LZFST Interest free limit (tax)
LZFSV Interest-exempt amount (SI)

England

LEXRT Exemption rate for small loans

Belgium

LMPEX Exemption amount - loan

South Africa

LZFGR Interest free limit

Activities

Check the constants and, if necessary, adjust the values in line with legal changes.

Further Notes

For more information, refer to the SAP Library Payroll -> Deductions -> Loans -> Calculating Imputed Income.