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Purpose
Before the SAP Payroll component sends any data to the BSI TaxFactory for tax calculation, the payroll driver goes through a number of steps to determine exactly which taxes will be applied for each payment or deduction wage type. These steps depend largely on how you configure wage types, tax types, tax authorities, and taxability models in the Tax section of the Payroll: USA IMG. This topic illustrates the process by which the payroll driver determines which tax calculations will be performed by the BSI tax calculation engine.
Prerequisites
Process Flow
The following graphic illustrates the SAP tax calculation process.

The tax calculation process follows these steps:
Tax Authority |
Tax Model |
R/W/U |
Tax Class |
Tax Type Combo |
FED |
01 |
R |
0 |
08 |
Amount |
Tax Type |
$1000 |
01 Withholding tax |
$1000 |
02 EIC payment |
$1000 |
03 EE Social Security |
$1000 |
04 ER Social Security |
$1000 |
05 EE Medicare |
$1000 |
06 ER Medicare |
Result
The tax wage types determined in this process are stored in the payroll results cluster for the employee. These tax wage types can also be copied to the tax interface tables where they form the basis for various tax reports generated by the SAP Tax Reporter component.