Hi Friends,
We have an issue where we have a 2 wage types paid together - Salary wage type (PCL 68 - 1 Regular Payment) and Gross Up wage type (PCL 68 - 5 Perform Gross Up using Regular Method).
Ideally both these wage types should be considered as summed up amount and taxed uniformly using respective slabs.
But, we send it on separate BSI calls to BSI for taxing it which is leading to issue of tax slabs and formula being applied twice which is not matching to IRS calculation.
Example:
Salary WT amount = $10,000 and Gross Up Regular payment WT amount = $10,000
SAP sends $10,000 as Regular Payment to BSI which is calculates employee withholding tax of $250 say.
Also, SAP sends $10,000 as Guaranteed Net for Regular Payment to BSI which is calculates total employee tax of $1,350 (to say) to give Gross Up gross = $11,350 which calculates withholding tax = $300 say
Both of these payments is checked individually for tax slabs which falls in different slab to vary for tax claculation whereas when Gross Up Gross amount is added to regular salary it falls in different slab to vary tax calculation.
Your expert comments or assistance on this would be helpful.
Also, I would like to know how gross up gross amount is arrived by BSI when tax slabs are associated as no tax rate would apply directly like we arrive at tax rate for gross up gross calculation when using supplemental method using rates from different employee tax components.
Would like to know how this is being handled for your clients.
Thanks,
Ameet