Monday, October 20, 2014

Payroll Korea - Tax Deductions and Tax Credits

In SAP Payroll Korea, there are a number of standard tax deductions and tax credits built in the system before generating the actual taxable income. For the deductions that took place, technical wagetypes that reflect those deductions will be generated such as 
 
/Y2D (Earned income deductions)
/Y2E (Adjusted Income)
/Y3E (Basic Deduction for Employee)
/Y3G (Spouse Deduction)
/Y3S (Old Age Deduction)
/Y3T (Handicap Deduction)
/YSG (Single Parent Deduction)
/Y5T (Donation Deduction)
/Y4C (Insurance Deduction)
/Y70 (Housing Deductions)
/Y7M (Overseas Income)
etc..

This spreadsheet attempts to list out these tax deductions according to category, along with the limits or capping that applies for each deductions. The constants name from T511K or T511P that holds these limits are also listed in the spreadsheet.

Also included in the spreadsheet is a list of cumulation classes and its corresponding technical wagetype that it will generate for non taxable wagetypes.
For example, a non taxable Meal Allowance can be configured by flagged it into /132. After payroll is run, the technical wagetype that is generated is /3N2. This will be reported in the Year End Tax Report as a non taxable income. The constant name and the limit amounts that the system will validate against, is also listed in the spreadsheet.



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