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GPAUS: MARGINAL TAX Is Over Deducted When AC(TAX AC MARGINAL) Becomes Negative In The Last Segment (Doc ID 2491497.1)

Last updated on JULY 22, 2020

Applies to:

PeopleSoft Enterprise HCM Global Payroll Australia - Version 9.2 and later
Information in this document applies to any platform.


AUS Payroll: In below scenario, the employee will be underpaid (Deducted too much MARGINAL TAX).
There are multiple segments for one period, but the marginal taxable amount AC (TAX AC MARGINAL) has a negative value in the last segment of one period.
For example, the employee has $2000 TAX AC MARGINAL in segment 1, and deducted marginal tax based on value $2000.
However, he/she has some income reducing the taxable amount in segment 2, so he/she has $-1000 TAX AC MARGINAL in segment 2.
In segment 2, there won’t be any marginal tax generated. Thus, the employee reduces MARGINAL TAX based on the amount 2000 instead of 1000 (2000 - 1000).

The issue can be reproduced at will with the following steps:
1.Employee KA0022, who is currently in pay group KABIWEEKLY, has marginal tax $791 in KA 2017B19 based on PTD taxable earning 3161.
2.Giving a taxable earning of $-1000 or a positive deduction.
3.His marginal tax becomes $445, based on new PTD taxable 2161.
4.However, if employee has a transfer close to period end date, even without any compensation change, e.g. transfer to another department.
5.This triggers segmentation: Gross=$2845.10-$683.88=$2161.22, remains the same. Marginal tax=$683+$0=$683, higher than the correct amount 445, therefore employee is underpaid by $683-$445=$238.
6.In first segment: PTD taxable earning(TAX AC PTD EARN) = 2845.10 and Segment taxable earning(TAX AC MARGINAL) = 2845.10
7.In second segment: PTD taxable earning(TAX AC PTD EARN) = 2161.22 and Segment taxable earning(TAX AC MARGINAL) = -683.88
8.Marginal tax should be calculated based on PTD amount 2161.22, instead of being bypassed only because segment taxable earning is negative.




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