This infotype stores an employee's PAYE details.

All the information needed by the Payroll component to calculate PAYE for an employee is stored in this record. The Payroll component uses this data to make the correct tax deductions from wages and salaries.

When new employees join your company, you need to create a Tax Data record for each of them. If you do not receive the tax details for a particular employee immediately, you should wait until you receive this information before you create the record. If you have no tax details for the employee, the system uses the default values set up in Customizing for Payroll to calculate PAYE.

One of your required start-of-year activities is to create a new Tax Data record for each employee. Employee tax situations may also change during the course of employment. If this is the case, you will need to create new records to reflect each of these changes.

The Payroll component uses the employee tax code to calculate tax deductions or refunds.

If you do not create a Tax Data (infotype 0065) record for a new employee before running payroll, deductions are calculated on a week1/month1 tax basis, using a default tax code.

For more information, see the Implementation Guide (IMG) for Payroll: Great Britain (Basic Settings ® Employer's Tax and CA Registration Details ® Assign PAYE Reference to Payroll Area).

Retrocalculation is not triggered if you create a Tax Data record after you include the employee data for payroll.

When you create a tax record for an employee, the cumulative tax basis appears as the default. If necessary, change this to a week1/month1 tax basis.

Tax refunds are withheld from employees who are on strike. They can be paid out when the employee either resumes work or leaves the company. You must create a new tax record for employees who are on strike. When you do this, remember to set the On strike indicator for the period of industrial action.

Here you enter the figures from the new employee’s P45 or from the P6 sent by the tax office.

On the basis of this information and the tax code specified, the system checks whether the tax paid on the P45 is the same as tax paid to date from the tax tables. If this is not the case, the system displays a warning message and enters the correct figure in the P45 Item 12 field. It also sets the P45 Item 12 used in Payroll indicator so that the corrected figure is used when you next run payroll.

You should also enter this corrected figure at Item 12 on Part 3 of the employee's actual P45 form. This will indicate to the tax office that a discrepancy exists.

P45 data is only used for calculations made during the financial year in which the employee joins your company.

To issue a P45 when an employee leaves the company, you need to set the P45 been issued indicator and enter the date on which the form was issued. This ensures that the Payroll component uses the basic rate to deduct tax if a late payment is made to the employee.

Backdated changes to the Tax Data (infotype 0065) record do not trigger retrocalculation. This is because the tax is adjusted by cumulative calculation.