FUSION PAYROLL: Element With Taxation Over Multiple Pay Periods Not Working as Expected (Doc ID 2199547.1)

Last updated on NOVEMBER 01, 2016

Applies to:

Oracle Fusion Global Payroll Cloud Service - Version 11.1.11.1.0 and later
Information in this document applies to any platform.

Symptoms

On : 11.1.11.1.0 version, US - United States Legislation

ACTUAL BEHAVIOR
---------------
Imputed tax over multiple pay period is not taxed.

EXPECTED BEHAVIOR
-----------------------
Imputed tax over multiple pay period should be taxed as a delivered functionality

STEPS
-----------------------
The issue can be reproduced at will with the following steps:
1. Setup a Imputed Earnings with the question to tax over multiple period set to Yes
2. Setup tax period of 4 with a amount of 10,000
3. Run the payroll process


BUSINESS IMPACT
-----------------------
The issue has the following business impact:
Due to this issue, the tax deducted is incorrect.

Medicare EE Tax 177.98 which is 1.45% of 2274.50 (Medicare Taxable for this period ) plus 1.45% of $10,000 from previous period
Medicare Tax is Self Adjusting

SS EE Tax 761.02 which is 6.2% of 2274.50 (SS Taxable for this period ) plus 6.2% of $10,000 from previous period
SS Tax is self adjusting

 

Reference:

NOTE: Oracle Fusion HRMS (US): Implementation and Use (Doc ID 1676530.1)

Page 128

Earnings Taxation Over Multiple Pay Periods

Instead of taxing an earnings payment in only the current pay period, you may choose to spread that taxation out across a number of months. As a result, the tax would be at a lower rate.
For example, if you tax a bonus of 10,000 USD in only one period, the tax amount would be higher than if you taxed that same bonus amount over 6 months.
In order to accomplish this, the element template provides the “Tax this earning across multiple pay periods” question during element definition. If you answer Yes to this question, the template creates a Taxation Pay Periods input value. This new input value allows you to define how many pay periods to tax the payment over on the employee’s element entry for that earnings code.
Note: In order to include this input value as part of the element, you must also answer the “Process and pay element separately or with other earnings elements?” element template question with one of the following:

- Process separately, but pay with other earnings
- Process separately and pay separately

Cause

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