ER Allowance for EE with Voluntary HI (& other variables)  

Your employee Markus Schmitt is voluntarily insured and has several incomes. His total monthly HI contribution is a fixed amount, dependent on his contribution class, set by the insurance company.

The following specifications apply to Mr. Schmitt:

Monthly income at your company:

5,000.00 DM

Monthly income at the other company:

3,000.00 DM

Total income:

8,000.00 DM

Total monthly contribution (fixed amount)

780.00 DM

Annual income threshold for HI:

73,800.00 DM

General percentage for a compulsorily insured person:

12.8 %

Number of SI days:

30 days

Individual monthly income threshold:

(Annual income threshold / 360 days) X Number of SI days

Proportionately reduced in relation to total income:

5,000.00 DM / 8,000.00 DM) X 6,150.00 DM

 

6,150.00 DM

 

3,843.75 DM

 

The following amounts are determined in the payroll run (depending on the calculation process in the view V_T5D1N ( Procedure to calculate employer contribution):

 

Actual Total Contribution:

The actual total contribution is a fixed amount, transferred monthly by your company to the health insurance fund. This amount is determined by the health insurance company, using the contribution class in the Social Insurance D infotype (0013). According to these specifications, the relevant contribution is read from view Fixed Contributions for Health Insurance (V_T5D1O).

This is a fixed contribution and is not reduced (even for multiple recipients).

In this example, the fixed contribution is 780.00 DM.

 

Dummy Total Contribution:

This is the contribution used by your company to determine the employer’s health insurance contribution.

In the case of Mr. Schmitt, your company pays an employer’s allowance for voluntary health insurance. The standard system assumes that the dummy total contribution is also the fixed contribution, (in this example, 780.00 DM).

In the standard system, the employer’s allowance is half of this dummy total contribution, but no more than half of the actual total contribution. As the dummy and actual total contributions are identical in our example, Mr. Schmitt receives an employee allowance of 390.00 DM.

This does not take into account that Mr. Schmitt has other sources of income from different employers. The employer’s allowance is not calculated as a proportion of income, but remains at one half of the fixed contribution.

 

Tax Admissible Settlement Contribution:

This is also a dummy total health insurance contribution, which is used to calculate the tax-exempt employer’s contribution.

In the standard system, the tax- admissible settlement contribution is determined using the individual, monthly income threshold for an employee with voluntary health insurance.

The individual, monthly income threshold for a multiple recipient is proportionately reduced. The reduction takes place relative to income at your company to the total income.

Monthly income at your company:

5,000.00 DM

Total income:

8,000.00 DM

Reduction factor: (5,000.00 DM / 8,000.00 DM)

0.625

Individual monthly income threshold:

6,150.00 DM

proportionately reduced: (6,150.00 DM X 0.625)

3,843.75 DM

 

You calculate the tax- admissible settlement contribution using the general percentage rate that a compulsorily insured person has to pay to the health insurance company, relative to the proportionately-reduced, individual, monthly income threshold:

 

12.8 % of 3,843.75 DM = 492.00 DM

half of which: = 246.00 DM

The standard system determines half of the actual total contribution (but no more than half of the tax- admissible settlement contribution) as the tax-exempt employer’s contribution. In our example, this is the smaller of 390.00 DM (half of the actual total contribution) and 246.00 DM (half of the tax- admissible settlement contribution). Therefore, 246.00 DM.

 

Result Without Constant:

A total contribution of 780.00 DM is transferred for Mr. Schmitt to the health insurance company. The employer’s allowance is 390.00 DM. Only 246.00 DM is tax-exempt. The remaining 144.00 DM is liable for tax and social insurance.

 

Result with Constant:

With constant calculations, the tax-exempt employer’s contribution of 246.00 DM is always paid out as the employer’s allowance. In this way, there is no tax or social insurance liability . Also, the employee only receives an employer’s allowance adjusted to his or her income at your company.

Health insurance constants are used for employees with the SI attribute 25 in the Social Insurance D infotype (0013), (exempt and below the annual income threshold).

If you want to use this procedure (that is, only pay out the tax-exempt employer’s allowance), you must set SI attribute 25 for employees with voluntary health insurance and multiple benefits in the Social Insurance D infotype (0013).