Year-End Adjustment
Use
The year-end adjustment (YEA) payroll run adjusts the tax amount for the year by comparing the total prepaid tax amount of the year to the actual tax amount, based on the real annual income. Depending on the result, the tax office may collect more tax from, or refund tax to, a particular employee.
The year-end adjustment processes as below:
1. Calculate employees’ taxable income (that is the total income minus non-taxable income) |
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2. Specify the earned income deduction |
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3. Specify the personal deduction, special deduction and other income deduction |
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4.Get the taxation base (that is the taxable income amount minus all relevant deductions) |
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5.Check the legal tax rate table |
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6.Calculate tax (that is to multiply the taxation base by the corresponding tax rate) |
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7.Specify the tax credit and reduction/exemption |
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8.Determine the tax amount |
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9.Check and compare the prepaid tax amount |
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10.Collect or refund tax |
SAP recommends that the YEA is run before the January monthly payroll run. For example, YEA for 1999 must be run before the January 2000 monthly payroll.
Prerequisites
You must have maintained the following infotypes:
· Personal Tax Status infotype (0541)
· Family/Related Person infotype (0021)
· Personal Data infotype (0002)
· Year-end Adjustment Data infotype (0542)
● Medical Expense for DME infotype (0812)
● Donation Expense Infotype (0858)
● Expense Information Infotype (0881)
See also: