What is 'income threshold deficit' in SAP PY-DE - Germany?

income threshold deficit - Overview

• Component: PY-DE

• Component Name: Germany

• Description: Social Insurance: Used to calculate the part of a non-recurring payment that is liable to contributions. The income threshold deficit is determined by deducting remuneration for which contributions have already been paid from the prorated social insurance income threshold for the current calendar year up to the point that the non-recurring payment is assigned. The income threshold deficit is usually recalculated each month by the difference between the monthly income threshold and current remuneration increasing the income threshold deficit of the current year.

income threshold deficit - Details

• 
  Key Concepts: 
  Income threshold deficit is a feature of the PY-DE Germany component of SAP. It is used to calculate the amount of income tax that an employee must pay in Germany. The income threshold deficit is calculated by subtracting the employee's taxable income from the tax-free allowance for the year. 
  
  How to use it: 
  Income threshold deficit can be used to calculate the amount of income tax that an employee must pay in Germany. To do this, the employee's taxable income must first be determined. This can be done by subtracting any deductions from their gross salary. Once this has been done, the taxable income can then be subtracted from the tax-free allowance for the year to determine the income threshold deficit. 
  
  Tips & Tricks: 
  It is important to remember that the tax-free allowance for the year may change depending on the employee's circumstances. Therefore, it is important to check with a tax advisor or accountant to ensure that the correct allowance is being used when calculating the income threshold deficit. 
  
  Related Information: 
  The PY-DE Germany component of SAP also includes other features such as wage types, wage types for special payments, and wage types for deductions. These features can be used to further customize an employee's payroll and ensure that they are paying the correct amount of taxes.