Function UTPRI
*      The payroll function UTPRI processes all taxes according to their priority and deduction rules.  These rules are configured in table T5US0.

*      If the gross amount is not enough for deducting a tax, the amount of the tax may be reduced.

*      The amount that can not be taken is stored in the RT with a tax not taken wage type (i.e. /Nxx)

*      The payroll function UTPRI performs the following steps:
*       Determination of the gross amount
*       Prioritize all tax wage types
*       Check each tax with the gross amount

Determination of gross amount

*       The determination of the gross amount differs depending on whether the processing period is an original or a retro period.

Original payroll run

*      The gross amount is the gross payment amount.

*      More specifically, the gross payment amount is the sum of the gross wages, any refunded deductions, and the retrocalculated difference, less any claim amount.

Gross Amount = /101 + /110 (if non-negative) + /552 – /563

*      Note: Non-negative /110 are refunded deductions.

Retrocalculation payroll run

*      The gross amount is the total amount of all taxes which the employee paid in the original run (/5U0).

*      All taxes are added, from all tax types and tax authorities.

*      The information is selected from the original pay roll results

*      Note: UTPRI can be set as “uncapped.”  In this case, the gross amount is computed differently.  This is the only difference between “capped” and “uncapped”

All tax wage types are selected from RT and prioritized according to table T5US0.

Check each tax with the gross amount

*       Each tax wage type is compared with the remaining gross amount in the order of priority.  If the remaining amount is sufficient, the tax is taken completely.

*       If the remaining amount is less than the tax amount, the tax is processed according to the deduction rule defined in table T5US0.
*       Original period: Field ONTKR is used
*       Retro period: Field RNTKR

Check each tax with the gross amount

*       Rule value:
1- Take all (no /Nxx is generated, can lead to a claim)
2- Take as much as possible

*       Tax is taken until the gross amount remaining is zero.  The amount that cannot be taken is stored in the RT with a tax not taken wage type assigned in table T51P1

Example: Original period

*       An employee receives an $80 cash payment and a $920 non-cash payment.

Assumptions:
*       Assume that the tax priority is defined as follows:
FICA, FIT (Federal Income Tax), SDI (State Disability Insurance), SIT (State Income Tax)
*       Assume also that all of the taxes have deduction Rule 2 (Take as much as possible).
*       Suppose that the tax rates are as follows:
FICA: 1%
FIT: 10%
SIT: 2%

Then, the taxable wages are:

The taxes (as calculated) before UTPRI are:

There are $130 in total taxes.  However, the gross is only $80 so at most $80 can be taken in taxes.

*      First, FICA is considered:
The FICA tax is $10.  The gross is $80, so the tax will be taken completely.  The remaining gross is $70 = $80 – $10.

*      Next, FIT is considered:
The FIT amount is $100.  However, the remaining gross is $70. Thus, $70 will be taken and the remaining $30 of FIT are placed in a /N01 wage type. The gross amount remaining is $0.

*      Now, SIT is considered.
The SIT amount is $20.  Since the remaining gross is $0, the entire tax amount is placed in a /N01 wage type.

Net wages: $0
Example: Retro period

*       Suppose an employee is paid $1000 salary in period 01.2000.
*       After period 01.2000 has been processed, it is discovered that the employee, who had been living and working in NV during 1999, moved to CA at the beginning of the year.
*       Infotypes 207, 208, and 209 are retroactively updated to reflect the correct information.  When payroll for period 02.2000 is run, the employee will retro back to period 01 to account for the changed master data.

Assumptions:

*       Assume that the taxes are prioritized as before.
*       Suppose the tax rates are as follows:

NV                               |             CA

———————- | —————————
FICA:  1%                   |            FICA:  1%
FIT:      10%                |            FIT:      10%
|            SDI:     1%
SIT:      2%                  |            SIT:      5%

In the original result, the taxable wages and taxes are:

Total taxes: $130 (/5U0)

*      The remaining gross amount is $130, which comes from the /5U0 value in ORT.
*      In the retro run, before the call of UTPRI, the taxable wages and taxes are:

*      However, only $130 was taken out for taxes in the original result.  Thus, we only have $130 to allocate to the taxes of the retrocalculated result.

*       First, FICA is considered:

The gross amount is $130, which is the sum of the taxes from the original result.  Since the gross amount is larger than $10, the entire amount is taken and the gross amount is reduced      to $120 = $130 – $10.

*       Next, FIT is considered:

The FIT amount is $100, so the entire amount can be taken.  The gross amount is reduced to $20 = $120 – $100.

*       Now, CA SDI tax is considered:

Since the tax amount is less than the remaining gross, the entire $10 in SDI is taken and the remaining gross is reduced to $10 = $20 – $10.

*       Finally, CA SIT is considered:

The SIT is $50.  However, since the remaining gross is less than the tax, only $10 can be taken.  The remaining $40 of SIT is placed in the RT as a tax not taken wage type.

Original result

FICA Tax:     $10
FIT:               $100
SIT (NV):      $20

Retro result

Before UTPRI                After UTPRI

Uncapping

*       In the retrocalculated example, the amount of the taxes was “capped” to the amount of the taxes taken in the original result.  Some customers thought this to be excessively restrictive.
*       UTPRI can be set to be “uncapped”.  In this case, the taxes taken in the retrocalculated period can exceed the total taxes in the original period.
*       The gross amount in the uncapped case is computed as follows:
Gross amount = /101 + /110 (if non-negative) + /552 – /563

*       The uncapping is configured by using the value of “U” in the first schema parameter for UTPRI.
UTPRI            U         (blank)            (blank)            (blank)
*       See Notes 160993, 181657, and 185095 for more detailed information.

Configuration

*       UTPRI is found in the UTX0 standard subschema.  It must follow the tax calculation function USTAX.
*       UTPRI has only one permissible parameter setting.  The first parameter can be blank (to cap taxes) or “U” (for uncapped tax).  All other parameters must be blank.
*       Table T5US0 must be maintained for all tax types for priority and deduction rules.
*       Any necessary /Nxx wage types must be created.  SAP delivers the standard /N wage types.  These wage types must be linked to the corresponding /4xx wage type in table T51P1.  Refer to /N01 and /401 as an example.