Hierarchy
SAP_HRCDE (Software Component) Sub component SAP_HRCDE of SAP_HR⤷
PY-DE (Application Component) Germany⤷
PC01 (Package) HR Payroll: Germany
IMG Activity
| ID | PAY_DE_AVMG_000 | German Pension Reform - General Information |
| Transaction Code | S_AL0_96000368 | (empty) |
| Created on | 20011112 | |
| Customizing Attributes | PAY_DE_AVMG | Attribute for German Pension Reform |
| Customizing Activity |
Document
| Document Class | SIMG | Hypertext: Object Class - Class to which a document belongs. |
| Document Name | PAY_DE_AVMG_000 |
In this section you make the Customizing settings for the German Pension Reform.
Basics
As part of the German Pension Reform, employers are obligated to allow their employees to convert their salary into an employee contribution to their own pension scheme. As part of the German Pension Reform, the state supports this salary conversion by either granting a certain level of exemption from tax and SI contributions or permitting flat-rate taxation, or by granting a bonus (the Riester bonus). The type of grant depends on the salary conversion method.
The following execution methods are possible:
- Pension Fund (PK)
- Pension Fund (PF)
- Company Insurance
- Relief Fund
- Employer Commitment
The last two execution methods (relief fund and employer commitment) are not eligible for the Riester bonus.
You set up the salary conversion using the execution methods pension fund (PK), pension fund (PF), and company insurance in the following Customizing activities.
Infotype German Pension Reform (0699):
In this infotype, you enter all relevant data for the pension reform contracts of your employees. For each investment type (execution method), there is a separate subtype in the German Pension Reform infotype.
Tax and SI-Based Handling of Contributions
The legislator provides a whole range of options. Contributions to the pension scheme through salary conversion can be exempt from tax and contributions, up to a maximum of 4% of the income threshold in pension insurance, or can be taxed at a flat rate up to a certain level. In both of these cases, an additional Riester bonus is no longer possible. However, the contributions can also come from individually taxed income. In this case, the bonus can be claimed.
Exemption from Tax and SI Contributions
Salary conversions that are a maximum of 4% of the income threshold in pension insurance are exempt from tax and SI contributions. The exemption from contributions in social insurance applies to employee and employer contributions. If the salary is converted exempt from tax and SI contributions according to this model, it is no longer possible to claim the bonus (Riester bonus).
Flat-Rate Taxation
Salary conversions up to 1,752 EUR or 2,148 EUR can be taxed at a flat rate according to sec. 40b EStG. Contributions at the level mentioned are generally exempt from SI contributions for the employer. The contributions remain exempt from SI contributions for employees if they come from a non-recurring payment, however, if they come from regular remuneration they become liable to SI contributions.
If salary is converted using the flat-rate taxation model, the Riester bonus is no longer possible for these contributions.
Individual Taxation
If the salary conversion is performed completely from income that has been taxed and from which contributions have been deducted, the employee can claim bonuses (the Riester bonus). The level of the bonus is staggered by year, up until 2008. To receive the grant, the employee must have made a minimum own contribution of 1% of the income liable to pension insurance contributions in the previous year.
Combination of This Taxation and Deduction of Contributions Procedure
Depending on the execution method, the procedures can occur in different combinations. Assuming an employee wants to convert a large amount of his or her salary on a monthly basis for his or her pension scheme. The partial contribution at the level of 4% of the income threshold is to be converted exempt from contributions and tax. The remainder is to be taxed at a flat rate and (since it is taken from regular remuneration) have social insurance contributions deducted. For the remainder that has been individually taxed and had contributions deducted, the employee wants to claim the Riester bonus.
Depending on the execution method, the following combinations are possible:
Pension fund (PK): Exempt from tax and SI contributions, taxed at a flat rate, taxed at an individual rate with bonus
Pension fund (PF): Exempt from tax and SI contributions, taxed at an individual rate with bonus
Company insurance: Taxed at a flat rate, taxed at an individual rate with bonus
Effects on Customizing for German Pension Reform
As a result of the above runs, the following points must be considered in Customizing for the German Pension Reform:
Investment Types:
The possible investment types are preset and cannot be changed. The execution methods are pension fund (PK), pension fund (PF), and company insurance. Supplemental insurance for bank employees is an additional investment type. You make Customizing settings for supplemental insurance for bank employees in the chapter Social Insurance -> Supplementary Insurance -> Bank Suppl.Ins..
Processing Types:
The processing types determine the type of financing and taxation as well as their sequence. The processing types are also preset by SAP and cannot be changed.
- Processing types for financing:
- Supplementary benefit employer regular
- Supplementary benefit employer non-recurring
- Salary conversion employee from regular payments
- Salary conversion employee from non-recurring payments
- Processing types for taxation:
Due to the various combination options depending on the investment type or execution method, the sequence of the individual taxation types plays an important role within the processing type: - Individual taxation and deduction of contributions:
The employee converts income that has been individually taxed and had contributions deducted and therefore claims the bonuses.
This is possible for pension funds (PK), pension funds (PF), and company insurance. - Initial flat-rate taxation by the employer or employee, then individual taxation:
The employer makes a contribution to the employee#s pension scheme, which is taxed at a flat rate. Either the employer or employee pays this flat-rate tax.
The employee also converts a separate contribution from income that is taxed individually, for which he or she claims the bonuses.
This sequence is only possible for company insurance and pension funds (PK). - Initial tax-free conversion, then individual taxation:
The employee first converts tax-free up to a level of 4% of the income threshold in the pension insurance. Then he or she converts salary from income that is taxed at an individual rate and therefore claims the bonuses.
This sequence is only possible for pension funds (PF) and pension funds (PK). - Initial tax-free conversion, then flat-rate taxation by the employer or employee, then individual taxation:
The employee first converts tax-free up to a level of 4% of the income threshold in the pension insurance. The employer then makes a contribution that is taxed at a flat rate. The employee then converts salary from income that is taxed at an individual rate and therefore claims the bonuses.
This sequence is only possible for pension funds (PK).
Wage Types:
In this section you copy the provided model wage types and assign them to the German Pension Reform wage type group.
Processing:
In this section you determine the rules used to convert the salary to a pension scheme contribution.
Modules:
In a module, for each investment type (company insurance, pension fund (PK), and so on), you group the processing type for the financing and taxation. For example, you thus determine that the financing type Employee#s Salary Conversion from Non-Recurring Payments is linked with the taxation type Flat-Rate Employee, Then Individual Employee for the investment type Company Insurance.
You also determine whether the administrator is to enter a contribution in EUR or the percentage share of a wage type as the amount to be converted when maintaining the infotype German Pension Reform (0699).
You can also specify a conversion wage type group from whose wage types the amount to be converted is then deducted. You need a conversion wage type group if employees want to convert an amount or a percentage of certain salary elements, for example, each year 50% of the total holiday bonus and year premium. The conversion wage type group would then comprise the wage types for the holiday bonus and for the year premium.
Statement Wage Types:
You group the amounts that come from remuneration that is tax-free, taxed at a flat rate, or taxed at an individual rate in a statement wage type.
Contract Models:
In a contract model, for each investment type you group the permitted modules. This means that the administrator only needs to select the investment type and the contract model when maintaining the infotype German Pension Reform (0699). The possible modules are then suggested.
Processing Routines:
If the processing options provided in the stand
Business Attributes
| ASAP Roadmap ID | 203 | Establish Master Data |
| Mandatory / Optional | 2 | Optional activity |
| Critical / Non-Critical | 2 | Non-critical |
| Country-Dependency | A | Valid for all countries |
| Customizing Attributes | Country Key | Country Name |
|---|---|---|
| PAY_DE_AVMG_000 | DE | Germany |
Assigned Application Components
| Documentation Object Class | Documentation Object Name | Current line number | Application Component | Application Component Name |
|---|---|---|---|---|
| SIMG | PAY_DE_AVMG_000 | 0 | HLA0003752 | Tax |
Maintenance Objects
| Maintenance object type |
History
| Last changed by/on | SAP | 20051118 |
| SAP Release Created in | 470 |
