SAP ABAP Data Element PCN_EMRAT (Exempted contribution rate)
Hierarchy
☛ SAP_HRCCN (Software Component) Sub component SAP_HRCCN of SAP_HR
   ⤷ PA-PA-CN (Application Component) China
     ⤷ PB28 (Package) HR master data: China
Basic Data
Data Element PCN_EMRAT
Short Description Exempted contribution rate  
Data Type
Category of Dictionary Type D   Domain
Type of Object Referenced     No Information
Domain / Name of Reference Type DEC5_2    
Data Type DEC   Counter or amount field with comma and sign 
Length 7    
Decimal Places 2    
Output Length 9    
Value Table      
Further Characteristics
Search Help: Name    
Search Help: Parameters    
Parameter ID   
Default Component name    
Change document    
No Input History    
Basic direction is set to LTR    
No BIDI Filtering    
Field Label
  Length  Field Label  
Short 10 Emt c.rat 
Medium 15 Emt contri.rate 
Long 20 Exmpt contrib. rate 
Heading 10 Emt c.rate 
Documentation

Definition

Use

The exempted contribution rate and the exempted multiplier are used to determine whether the contribution amount can be fully or partly exempted from income tax. China's State Administration of Taxation has set this rate at 12% and the multiplier at three (3), but you can adjust these values to fulfill local regulations. Enter the rate as a whole number not a percentage. For example, if the rate is 12%, you enter 12 in the Emt.contri.rate field.

The State Administration of Taxation's regulation about exempting the contribution amount for the Public Housing Fund (PHF) is as follows. The contribution amount for PHF can only be exempted if both of these conditions are true:

  • The actual contribution amount from the employer (ER) or employee (EE) does not exceed the amount of the EE's average monthly salary in the previous year multiplied by the contribution rate 12%.
  • The contribution base for EE does not exceed three times the amount of the social average monthly salary in the previous year in the working place.

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

  1. 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 Taxable Salary 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 wage type /103 to calculate income tax.
    • Any positive difference for the employer is also added to wage type /103.

  1. The exempted contribution rate and the exempted multiplier are both empty.

    The entire contribution amount for PHF is exempted.

  2. 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 (10000 x 12%)
    • The actual contribution amount is CNY 1,500 (10000 x 15%)
    • The difference for the employee then equals CNY 300(1500-1200) and is added to wage type /103 to calculate income tax.
    • Any positive difference for the employer is also added to wage type /103.
  3. The exempted contribution rate is empty but the exempted multiplier has a value.

    This input is not permitted, and an error occurs.

Dependencies

Example

History
Last changed by/on SAP  20070912 
SAP Release Created in