Why Is "Additional Tax Deduction" Created Even Though Positive and Negative Retro Entries Generated From Same Pay Period Has Net Result of Zero? (Doc ID 1982672.1)

Last updated on JULY 14, 2016

Applies to:

Oracle HRMS (Australia) - Version 12.1.3 and later
Information in this document applies to any platform.

Goal

Why is 'Additional Tax Deduction' being created in spite of the net dollar value of all the retro entries totalling to zero?

Example to illustrate:

1.     Run a QuickPay for the first pay period '1 2015 Bi-Week' (16-JUN-2014 - 29-JUN-2014) of the new Financial Year (FY) with a 'Date Paid' in the previous FY (e.g. 24-JUN-2014).

2.     Enter current period earning for the same period and process a regular pay run for the employee. The 'Date Paid' this time is in the new FY (e.g. 3-JUL-2014).

3.     Now run a Retro involving the above pay period with a Reprocess Date earlier than 24-JUN-2014.

This creates positive retro earnings for the current period corresponding to the QuickPay run, and negative retro earnings corresponding to the regular payroll run.  The net $ value of the all the retro entries is zero as the positve and negative retro entries for the same retro element would cancel each other and have no tax implications.

However in this case as the QuickPay has a 'Date Paid' in to the previous FY, the positive retro entries is created using the "…Less Than 12 Months" retro element, while the negative retro entries gets created using "…Current Financial Year".

4.    Now in the next pay period 2 2015 Bi-Week run a regular pay run for both the retro entries and the usual period earnings.

Retro entries creating 'Additional Tax Deduction' which results in the employee being over taxed even though there's not a single cent increase in either Gross or Taxable Gross. 

 

Is this a bug?

 

Solution

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