How To Fix HRPAYDEST601 - Process flow: Tax calculation for multiyear payments

SAP Error Message - Details

• Message type: E = Error

• Message class: HRPAYDEST - Message Class: Taxes Germany

• Message number: 601

• Message text: Process flow: Tax calculation for multiyear payments

&INFO&
The taxation of multiyear payments is usually performed in four steps:
Taxation according to year table without the multiyear payment
Taxation according to year table with full multiyear payment
Taxation according to year table without the multiyear payment
Taxation according to year table with one-fifth of the multiyear payment
The tax as other payment is calculated as the difference between the
calculated employment tax from steps 2 and 1:
Tax(other) = Tax(2) - Tax(1).
The tax as a multiyear payment is calculated as five times the
difference between the calculated employment tax from steps 4 and 3,
plus the difference between steps 3 and 1. An exception to this is when
the taxable income from step 2 minus the multiyear payment is negative
(see below).
Tax(multiyear) = 5 * [Tax(4) - Tax(3)] + Tax(3) - Tax(1)
If taxation as other payment is more favorable, this method is used.
Otherwise the taxation takes place as a multiyear payment. Negative tax
on a multiyear payment is no longer allowed.
In 2009, the tax exemptions that were calculated in step 2 are also used
in steps 3 and 4. The tax exemptions include:
Employee flat rate,,
Special charges flat rate,,
Flat rate for single parents,,
Pension flat-rate,,
Tax exemption for pensions
Pensions tax exemption allowance,,
Old-age exemption amount,,
Personal exemption according to employment tax card,,
In contrast to PAP 2008, the calculation of tax for remuneration for
multiyear employment has been changed. In PAP 2008, at least the pension
flat rate was deducted from the total of (wage + 1/5 income from
multiyear employment). If no (or a low) wage was paid in the payment
year, this meant the pension flat rate was counted up to five times.
In PAP 2009, when income from multiyear employment exists, the system
checks whether the taxable income without income from multiyear
employment is negative after deducting the pension flat rate, table
allowances, and other exemptions. If this is the case, the total of
negative taxable income and income from multiyear employment is
calculated and divided by 5, and the tax on this fifth is calculated and
then multiplied by 5 to arrive at the final tax amount. In PAP 2009,
pension flat rate and table exemptions are therefore taken into account
just once. In this case, the taxation as a multiyear payment is
calculated from the difference between this result and the employment
tax from step 1.
In PAP 2010 and 2011, the tax of multiyear payments is calculated in the
same way as in 2009.

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

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message HRPAYDEST601 - Process flow: Tax calculation for multiyear payments ?

  The SAP error message HRPAYDEST601 typically occurs during the tax calculation process for multiyear payments in the payroll module. This error can arise due to various reasons, including configuration issues, incorrect data entries, or problems with the payroll processing logic.
  Cause:
  
  Incorrect Configuration: The payroll schema or the tax calculation rules may not be correctly configured for handling multiyear payments.
  Data Issues: There may be inconsistencies or errors in the employee master data, such as incorrect tax information or missing data.
  Payroll Period Issues: The payroll period may not be set up correctly, leading to issues in calculating taxes for payments that span multiple years.
  Custom Code: If there are custom enhancements or modifications in the payroll process, they may not be handling multiyear payments correctly.
  
  Solution:
  
  Check Configuration: Review the payroll schema and ensure that the tax calculation rules are correctly set up for multiyear payments. This may involve checking the relevant infotypes and configuration settings in the SAP system.
  Validate Employee Data: Ensure that all employee master data is accurate and complete. Pay special attention to tax-related infotypes (e.g., IT0012, IT0207) to ensure that the tax information is correct.
  Review Payroll Periods: Verify that the payroll periods are correctly defined and that the system is set up to handle payments that span multiple years.
  Debug Custom Code: If there are any custom enhancements, debug the code to identify any issues that may be causing the error during the tax calculation process.
  Consult SAP Notes: Check the SAP Support Portal for any relevant SAP Notes that may address this specific error message or provide guidance on handling multiyear payments.
  
  Related Information:
  
  SAP Documentation: Refer to the official SAP documentation for payroll processing and tax calculation to understand the standard processes and configurations.
  SAP Community: Engage with the SAP Community forums to see if other users have encountered similar issues and what solutions they have found.
  Testing: After making any changes, conduct thorough testing in a development or quality assurance environment to ensure that the issue is resolved before moving to production.
  
  If the issue persists after following these steps, it may be beneficial to consult with an SAP HR consultant or reach out to SAP support for further assistance.