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GPESP: Incorrect calculation for Severance Payment When employee Keeps Relation With the Company (Doc ID 2269101.1)

Last updated on FEBRUARY 03, 2019

Applies to:

PeopleSoft Enterprise HCM Global Payroll Spain - Version 9.1 and later
Information in this document applies to any platform.


When an employee is fired, but keeps the relation with the company, the taxes for severance payment are not calculated correctly. In that case the law specifies that the severance payment even if paid according with the legal amounts needs to be taxed
Taxation of the amount needs to follow the rules of irregular reduction in case the seniority is above the corresponding number of years (i.e 2 years in the state fiscal territory)

The issue can be reproduced at will with the following steps:
1. Terminate an employee, but maintain relationship with the company
2. Calculate payroll


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