SAP ABAP IMG Activity OHACN_PHF008 (Define Contribution Base Indicator, Rate or Constant)
Hierarchy
☛ SAP_HRCCN (Software Component) Sub component SAP_HRCCN of SAP_HR
   ⤷ PY-CN (Application Component) China
     ⤷ P28C (Package) HR Customizing: China
IMG Activity
ID OHACN_PHF008 Define Contribution Base Indicator, Rate or Constant  
Transaction Code S_KPH_31000164   IMG activity: OHACN_PHF008 
Created on 20000830    
Customizing Attributes OHACN_PHF008   Define Contribution Base Indicator, Rate or Constant 
Customizing Activity OHACN_PHF008   Define Contribution Base Indicator, Rate or Constant 
Document
Document Class SIMG   Hypertext: Object Class - Class to which a document belongs.
Document Name OHACN_PHF008    

In this step, you define the employee and employer contribution for each group of employees based on the combination of contribution area, industry, contribution group and level. You define the contribution by specifying a fixed amount or a percentage of the employee's salary based on a particular salary base indicator (within a particular range).

Activity

To create a new entry:

  1. Choose New entries.
  2. Enter contribution area, industry, contribution group and level.
  3. Enter the validity period.
  4. For employee/employer contribution, choose from indicator C, D, L, M, N, S, T or U.
    • C: Current month salary
      • Contribution base is from the wage type /150, which is the salary being prorated.
    • D: Direct entry in the field Amount
      • You define the final contribution amount in the field Amount.
    • L: Social lowest monthly salary in the previous year
      • The contribution base amount needs to be set in the next implementation step Maintain Base Salary Information in Calculation.
    • M: Personal average monthly salary in the previous year (Old)
      • Contribution base is from wage type /301 - /30D depending on the switch period of the contribution area:

Switch period                Contribution base from wage type

1                /301

2                /302

3                /303

4                /304

5                /305

6                /306

7                /307

8                /308

9                /309

10                /30B

11                /30C

12                /30D

The cumulation of monthly salary and the setting of /301 - /30D are customized in the implementation step Time Wage Type Valuation -> Averages.
In case you have new hired employees or your system goes life, there are no history payroll results to calculate the average monthly salary in the previous year. You have to determine one manual input wage type for "Personal average monthly salary in the previous year" by processing class 69. The calculation rule CN69 reads processing class 69 to transfer wage type as a contribution base.
By using this indicator, the calculated contribution base is the same for all social insurance types or public housing fund, that is, only one contribution base.
  • N: Personal average monthly salary in the previous year (New)
    • Contribution base is from wage type /315 - /365 depending on the social insurance type and public housing fund:

SI type or PHF            Contribution Base from WT            Previous year average salary from WT

Pension Insurance (PI)            /315            /316

Unemployment Insurance (UI)            /325            /326

Medical Care Insurance (MI)            /335            /336

On-job Injury Insurance (II)            /345            /346

Maternity Insurance (BI)            /355            /356

Public housing fund (PHF)            /365            /366

The cumulations of monthly salary for different social insurance types or public housing fund are defined in the wage type /3X6 in the implementation step: Time Wage Type Valuation -> Averages.
In every January, /3X6 gets the personal average monthly salary of the previous year and keeps using the amount for one year. Wage type /3X5 forms the contribution base amount which is changed in every switch period.
For example, the switch period for a contribution area is July:

Before July, 2002                In July, 2002

/3X5 = 2000's Pers.Ave.Mon.Sal                /3X5 gets amt. from /3X6 and keeps it till next June

* /3X6 is the Average Monthly Salary of 2001.

If you have new hired employees or your system goes life, there are no history payroll results to calculate the average monthly salary in the previous year. You should determine one manual input wage type "Personal average monthly salary in the previous year".
You are highly recommended to use the indicator N if you do not have any customizing setting for the indicator M.
  • S: Social average monthly salary in the previous year
    • The contribution base needs to be set in the implementation step Maintain Base Salary Information in Calculation.
  • T: Current contract salary
    • Contribution base is from wage type /390 which is the salary without being prorated. Rule CNCO reads processing class 68 to evaluate the wage types and form /390.
  • U: User input contribution base
    • You should specify the wage type name and maintain it in the infotype 0014 with valid period for each employee.
    By using the report "China PHF/SI contribution base retrieve/upload", you are able to do batch maintaining wage types in the infotype 0014 for a group of employees. You can access the report from the Payroll menu by choosing Human Resources -> Payroll -> China -> Subsequent Activities -> Period-independent -> PHF / SI Contribution Base Retrieve/Upload.

  1. Choose the rounding indicators which specify the rounding method of:
    • Employee contribution base
    • Employee contribution amount
    • Employer contribution base
    • Employer contribution amount

      Specifically, there are six kinds of rounding methods:

    • 1: Commercial rounding to Yuan
    • 2: Commercial rounding to Jiao
    • 3: Round down to Yuan
    • 4: Round down to Jiao
    • 5: Round up to Yuan
    • 6: Round up to Jiao
  2. Choose whether implement the special regulation about Public Housing Fund tax deduction

    If you set the value in the Emt contri. rate field, the system use the special regulation to calculate the PHF tax deduction.

    There are four possible combinations involving the exempted contribution rate and exempted multiplier.

    The exempted contribution rate and exempted multiplier both have a value. The system calculates the exempted contribution amount as follows:

  • The exempted contribution amount = exempted contribution base x exempted contribution rate
    • When the contribution base is greater than the multiplier times the social average monthly salary of the previous year, the exempted contribution base equals the multiplier times the social average monthly salary of the previous year.
    • When the contribution base is less than or equal to the multiplier times the social average monthly salary of previous year, the exempted contribution base equals the actual contribution base.
  • The actual contribution amount = contribution base x actual contribution rate
  • After calculation, if the actual contribution amount is less than the exempted contribution amount, the actual contribution amount is not taxable. If the actual contribution amount is greater than the exempted contribution amount, the difference should be added to wage type /103 to calculate income tax.
  • For example, if the exempted contribution rate is 12%, the exempted multiplier is 3, the employee's average monthly salary in the previous year is CNY 10,000, the actual rate is 12%, and the social average monthly salary of the previous year is CNY 3,000, the calculations are as follows:
    • Since CNY 10,000 is greater than CNY 9,000 (3 x 3000), the exempted contribution amount is CNY 1,080 (9000 x 12%).
    • The actual contribution amount is CNY 1,200 (10000 x 12%).
    • The difference for the employee then equals CNY 120 (1200-1080) and is added to Taxable Salary wage type (/103) to calculate income tax.
    • Any positive difference for the employer is also added to wage type /103.

The exempted contribution rate has a value but the exempted multiplier is empty.

  • In this case, the exempted contribution base has no upper limit. The relationship of the contribution base to the multiplier times the social average monthly salary of previous year is not relevant. The exempted contribution base always equals the contribution base.
  • For example, if the exempted contribution rate is 12%, the exempted multiplier is empty, the employee's average monthly salary in the previous year is CNY 10,000, the social average monthly salary of the previous year is CNY 3,000, and the actual contribution rate is 15%, the calculations are as follows:
    • The exempted contribution amount is CNY 1200 (1000
Business Attributes
ASAP Roadmap ID 204   Establish Functions and Processes 
Mandatory / Optional 1   Mandatory activity 
Critical / Non-Critical 1   Critical 
Country-Dependency I   Valid for countries specified 
Customizing Attributes Country Key Country Name
OHACN_PHF008 CN China
Assigned Application Components
Documentation Object Class Documentation Object Name Current line number Application Component Application Component Name
SIMG OHACN_PHF008 0 JD10000020 Payroll Data 
Maintenance Objects
Maintenance object type C   Customizing Object 
Assigned objects
Customizing Object Object Type Transaction Code Sub-object Do not Summarize Skip Subset Dialog Box Description for multiple selections
V_7CN20_PHF V - View SM30 CN01 Maintain Contribution Base 
History
Last changed by/on SAP  20000830 
SAP Release Created in 46C