GPAUS: Incorrect Periodic Tax When Employee Has No Taxable Income In Previous Financial Year
Last updated on MAY 31, 2018
Applies to:PeopleSoft Enterprise HCM Global Payroll Australia - Version 9.2 and later
Information in this document applies to any platform.
An employee has no marginal taxable income across a whole financial year (e.g. FY2017) due to non pay leave or other reasons, but has taxable income in the year before (FY2016), and the first period of the previous year (2017) starts before July 1st, which is very normal when you use biweekly periods. When this employee is terminated in current financial year (FY2018), taxable income in previous financial year (which is zero in this case) should be taken into consideration. However system is using taxable income of 2016 instead. This is against ATO periodic tax calculation rule.
The PERIODIC TAX calculated in 8.53 tools environment is using the incorrect instance of accumulator TAX AC TAX WKS YTD relevant to the value retrieved for TAX AC TXBLGRS YTD. It should be using the result of FY2017. The 8.55 tools environment is using FY2017 result. I believe this is caused by the changed sorting behaviour that exists in 8.55 Tools. I understand that the default (and only) sort logic is ascending sort. This would mean that the FY2016 accumulator would be the first one encountered and a correct value retrieved.
STEPS TO REPLICATE:
The issue can be reproduced at will with the following steps:
1.Create period SCFY2016F026 and SCFY2017F01 in Demo environment, also calendars and calendar groups.
2.Transfer employee KA3014 to pay group KABIWEEKLY since 11/06/2016
3.Calculate employee in FY16F26.
4.Check two YTD accumulators, notice the slice begin date and end date are 01/07/2015 and 30/06/2016, same as fiscal year of pay entity.
6.KA3014 started taking non pay leave since 25/06/2016, which is the begin date of FY17F01, but falls out of fiscal year 2017. The leave lasted across the whole year.
7.In results, KA3014 didn’t get paid during FY17.
8.Check YTD accumulators TAX AC TAX WKS YTD and TAX AC TXBLGRS YTD. TAX AC TAX WKS YTD: there are two rows because the period begin date falls in fiscal year 2016.
9.TAX AC TAX WKS YTD: There are only one row of fiscal year 2016 because the result of 2017 is zero.
11.Employee is calculated in following periods of FY17 but never gets paid afterwards. In FY18 employee is terminated and attracts periodic tax. (For test purpose the rest periods of FY17 is not processed)
12.KA3014 is terminated in FY18F01
13.Calculate in FY18F01
14.Periodic tax is calculated incorrectly, when acquiring previous year taxable earning using historical rule
15.System fetches 3846.15 as result of FY2017, which is wrong.
Taxable earning of FY2017 is obviously zero. Such behavior is only because period FY17F01 has several days overlapped with financial year 2016. However this is inevitable if use biweekly periods
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