SAP Payroll Retro Accounting mechanism

Symptom

The following lists the most commonly asked questions about the tax calculation process in a retrocalculation scenario. This note will be updated periodically. Please always refer to the latest version.

Other Terms

Retro, UPAR1, UTPRI, Retrocalculation, FAQ

Reason and Prerequisites

Consulting guide to commonly asked tax questions.

Solution

1. Why use retrocalculation?

Answer: To automatically process HR Master Data changes, on demand payrolls and update financial postings and payroll runs.

2. How are retrocalculations triggered?

Answer: Retrocalculations are triggered automatically from retroactive changes to the master data, or they can be triggered manually from the payroll driver to trigger specific periods based on on changes to configuration that do not automatically trigger a retrocalculation.

3. How Payroll Processes Retrocalculations?

Answer: When payroll detects a retroactive change or is forced to recalculate to a specific date, it performs the following steps:

a) Determines which pay periods need to be recalculated (based on dates of changes/forced date).
b) Reruns the entire payroll process for each employee in those periods.
c) Creates a new payroll result for the employee, which becomes the ‘current’ or valid result for that period. based on current master data and configuration.
d) All payroll reports, including Tax Reporter, read the CURRENT and PRIOR results wherever recalculations exist.

4. How to recognize a retro calculation in the payroll cluster?

Answer: By looking at the “For period” and the “In period” of each result. Current results are always marked with an “A”. Old results are marked with “P” for prior and “O” for old.

5. Field P0003-RRDAT does not clear after successful payroll

Answer: This problem happens when the EE has infotype 7 maintained that has time evalaution status other than 0 and time evalation has not been run up to payroll period end date. Note 122450 can be used in this case. Some customers use this field to classify EE subgroup (e.g. salaried/wage earner), which is incorrect. EE subgroup should be configured the right place (Infty 1), not here.

6. In a retro situation, why is the pre-tax deduction withheld from the supplemental portion of the pay?

Answer: When there is a retro situation, the system uses a hierarchy to determine which pay to withhold the pre tax amount from. The system will follow REG, SUPP, VAC, TIPS and RETRO. Therefore, if a customer pays a bonus and a retro at the same time and there is NO REG the system will deduct the pre-tax from SUPP.

7. When I have a retro state tax change why doesn’t the system withhold the correct taxes for the new state?

Answer: This is controlled by the function UTPRI in the payroll sub-schema UTX0, which is delivered capped. This forces the system to reallocate the ORIGINAL taxes withheld and does not allow any additional taxes to be taken. By uncapping the function with adding a ‘U’ in parameter 1 the system will recalculate the taxes in accordance with the new state. See notes 160993, 181657 and 185095.

8. Why are there /NXX (XX= tax type) wage types generated and how are they cleared?

Answer: The /NXX wages types are generated when there is not enough net pay to withhold all of the taxes calculated for a pay. Only the self-adjusting types, e.g.03,04,05,06,10,20,31,41,& 41 will be cleared when there is enough money to withhold the deduction. The withholding tax types will not be cleared.

9. Does the table T5US0 for tax priorities come delivered?

Answer: Yes

10. I have a negative value in /5PY why are there no taxes being w/h?

Answer: When there is a negative value in the /5PY no taxes are calculated and a claim is generated. Taxes will not commence again until the /5PY has a positive value.

11. When will a BAL table exist?

Answer: The table BAL exists in the period where the retrocalculation is triggered. It has the same structure as XDFRT. It stores the inflows from the previous periods XDFRT’s. It is generated in a ‘good money’ situation.

12. When will an UNB table exist?

Answer: Table UNB is identical in structure to the BAL table. It stores amounts in a period where a claim exists. An UNB table exists only when there is a claim against the employee whose current wages do not cover the offset amounts brought into the period. In this case /5PY will be negative.

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