When the company makes payments in kind, it must make an employee employment tax payment.

Payments in kind are integrated into the employment tax deduction and payment (IRPF) calculation.

In the payroll Implementation Guide, under Employment tax ® Identify wage types for payments in kind, you have identified the wage types relevant for payments in kind, assigning them the corresponding cumulations. Likewise, under Specify Constant for Payments in Kind, the payment in kind constants have been set, both for the maximum deduction-free amount and for the minimum deduction percentage.

Deduction rate for payments in kind: As the legal percentage to be applied depends on the individual interpretation of the law, in the infotype ‘Tax data’ (0062) both options appear You can set the percentage to be applied through the constant PPAES of the table T511K in the activity of the implementation guide ‘Fix percentage applied for payments in kind’ Leave the constant value blank if you wish the percentage always to be the ‘calculated’ one. On the contrary, if you wish the percentage to be used to be the ‘applied‘ percentage, you should give the constant the value of '1'.

In the SAP system, the deduction-free amount for payments in kind received is specified by the PEILR constant in the view ‘IRPF amount constants’ (V_T5EI4). If the payment in kind estimate for the fiscal period in question is greater than the amount specified for this constant, an employment tax deduction payment is calculated from the first payment.

If the deduction percentage is lower than the value of the IMPES control constant in the view Control Constants (V_T5EI3), the later is then applied.

Deduction-free monetary compensation, as provided for in article 45 of the 'New Employment Tax Deduction Act' of 2/5/1999, is processed in the system through the Deduction-Free Amounts table T512C. This table determines the corresponding deduction-free amount based on either a wage type, a constant, or the value maintained in the table.

When the payroll schema is triggered, the ESC0 rule (Delimit wage types according to table T512C) calls up the E512C function for all the wage types which have a value '1' in the processing class 8. This function processes all the wage types affected by the IT for which entries are maintained in table T512C. As a result, the corresponding taxable and tax-exempt wage types are generated. Likewise, the system cumulates the deduction-free amount already used in another wage type and, if the distribution class value of this wage type is 3, it also detects the jump when the compensation exceeds the deduction-free amount previously set.

The wage types corresponding to the payment keys A, B and E are assigned to the wage type /156 (Tax basis of payments in kind). The wage types corresponding to the payment key G is assigned to the wage type /158 (tax basis for separate payments in kind of professional activities).