Hi Madhu ,
Below aer the processing steps:
Tax Types : Each type of tax has been assigned a 2 digit code, and is called as tax type.
These are maintained in the table T5UTT. It may be with holding tax , Employee SS ,Emploer SS, Medicare....
Tax Authority and Tax Model
First we assign to each Tax Authority a Tax Model. At this point a tax model can be any 3 character numeric. Table T5UTE, Then for each of the tax model, we have various combinations which are based on, the Infotypes (0207, 0208, and 0209), value of the tax modifier for the employee, and value of the processing class 71 for the wage type.
For a combination of these, we need to assign a Tax Combo, in Table T5UTM and For for each of these tax combos we assign the applicable tax types. Table T5UTY.
Payroll Schema wise : UTXO: Tax Processing is main schema in US payroll.
- Function UPAR1 with parameter BSI controls BSI Version
- BSI tax factory is that integrated with US Payroll and takes care of Federal,State and local taxes
- BSI handles tax polices, tax rates and annual tax changes and may be FUTA,SUI and SUTA rates
- BSI sends tax update bulletins (TUBS) to their customers on a regular basis.
- Function USTAX passes control to BSI and brings back tax realted technical wages from BSI.
- Tax related technical types starts from /401,/402..
- Generated in BSI and sent o payroll schema when processing the above function.
- Standard rule UPTX separates tax amounts for each of tax authorities
- Infotype 207 , 208 have a multiple tax authorities and levels (federal,state and local).
Hope you clear now.
Regards
Siva
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