How To Fix 5K221 - Tax formula will be defaulted to Option 1

SAP Error Message - Details

• Message type: E = Error

• Message class: 5K - HR: Messages for Canada

• Message number: 221

• Message text: Tax formula will be defaulted to Option 1

What causes this issue?

The tax formula is either missing in the existing tax record, or not
specified in the record to be created.

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

System Response

The tax formula will be defaulted to Option 1.

How to fix this error?

If tax Option 1 is used to determine the federal and provincial or
territorial tax deductions for the employee, complete the current data
maintenance activity and save the tax record.
If tax Option 1 is not used to determine the federal and provincial or
territorial tax deductions for the employee, specify the correct tax
formula and save the tax record.

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message 5K221 - Tax formula will be defaulted to Option 1 ?

  The SAP error message 5K221, which states "Tax formula will be defaulted to Option 1," typically occurs in the context of tax calculation in SAP systems, particularly when dealing with tax codes and tax determination procedures. This message indicates that the system is unable to determine the appropriate tax formula based on the configuration or the data provided, and as a result, it defaults to a predefined option.
  Cause:
  
  Missing Configuration: The tax calculation configuration may not be set up correctly. This could include missing tax codes, tax rates, or tax determination rules.
  Inconsistent Data: The data entered in the transaction may not match the expected values for tax determination, leading the system to default to a standard option.
  Tax Code Issues: The tax code used in the transaction may not be valid or may not have the necessary settings for the specific transaction type.
  Country-Specific Settings: If the system is configured for multiple countries, there may be country-specific settings that are not properly configured.
  
  Solution:
  
  Check Tax Configuration: Review the tax configuration settings in the SAP system. Ensure that all necessary tax codes and tax rates are defined and correctly assigned to the relevant tax determination procedures.
  Validate Tax Codes: Ensure that the tax codes used in the transaction are valid and have the correct settings. You can do this by checking the tax code configuration in the SAP system.
  Review Transaction Data: Check the data entered in the transaction for any inconsistencies or missing information that could affect tax determination.
  Consult Documentation: Refer to SAP documentation or help resources for specific guidance on tax configuration and troubleshooting tax-related issues.
  Test with Different Scenarios: If possible, test the transaction with different scenarios or data to see if the issue persists. This can help identify if the problem is data-specific.
  
  Related Information:
  
  SAP Notes: Check for any relevant SAP Notes that may address this specific error message or provide additional guidance on tax configuration.
  Transaction Codes: Familiarize yourself with transaction codes related to tax configuration, such as OB40 (Define Tax Codes for Sales and Purchases) and OBYZ (Maintain Tax Types).
  Support: If the issue persists after checking the configuration and data, consider reaching out to SAP support or your internal SAP team for further assistance.
  
  By following these steps, you should be able to identify the cause of the error message and implement the necessary solutions to resolve it.