PeopleSoft Enterprise Global Payroll for Japan 9.1 PeopleBook

Processing Retirement Allowances

This chapter provides an overview of retirement allowance processing and discusses how to:

Enter retirement allowance data.
Enter and process retirement allowances.
Set up payslips for retirement allowances.
Run the Retirement Allowance Withholding Tax report.

Understanding Retirement Allowance Processing

Upon retirement, payees may be eligible for a retirement allowance based on years of service, base pay, the reason for termination, or other criteria, according to your organization's policies. With Global Payroll for Japan, you can enter an employee's retirement allowance and have the system automatically calculate and deduct the related income tax and inhabitant tax (prefecture tax and municipality tax ) on retirement earnings. The system can also generate a withholding tax report and payslips for retirement allowances.

This section discusses:

Delivered elements for retirement allowances.
Viewing delivered elements.
Deduction processing rules.
Retirement allowance setup and processing.

Delivered Elements for Retirement Allowances

Global Payroll for Japan delivers these elements for processing retirement allowances:

Earning element (ER RET ALW).

Use this element when entering the earning amount of an employee's retirement allowance through positive input.
Accumulator (ER AC RET ALW EARN).

This elements stores the earning amount of the retirement allowance. It has two members: earning element, ER RET ALW, which you populate through positive input, and the accumulator ER AC RET CUST ERN, which has no contributing members as delivered. You can have additional earnings contribute to ER AC RET ALW EARN by adding earning elements as members of that accumulator.
Deduction elements (IN TAX RET, IH MUNIC RET), and (IH PREFT RET).

The system uses these elements to calculate income tax, municipality tax, and prefecture tax for retirement allowances.
Process list (JPRRET).

This is the process list that is associated with the delivered run type element.

Viewing Delivered Elements

PeopleSoft delivers a query that you can run to view the names of all delivered elements designed for Japan. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll 9.1 PeopleBook.

Deduction Processing Rules

Global Payroll for Japan processes tax deductions for retirement allowance earnings by:

Calculating the deduction amount of the retirement allowance, taking into account overlapping years of service and retirement due to disability.
Calculating the retirement allowance income after the deduction by summing the earning amount of the retirement allowance (that you enter through positive input) and the former retirement allowance paid in the same year (as reported on the Maintain Ret Allow Data JPN page) and subtracting the deduction amount of the retirement allowance.
Calculating the taxable amount of the retirement allowance.
Determining the income tax on the taxable amount of the retirement allowance, taking into account whether the employee submitted a retirement income report.

Note. The system calculates income tax of zero when the retirement allowance was paid due to death.
Determines the inhabitant tax based on the retirement allowance income after the deduction.

Retirement Allowance Setup and Processing

Retirement allowances are handled as unscheduled payments in an off-cycle run.

High-level steps for setting up and processing retirement allowances include:

Entering retirement allowance data, including the employee's years of service and data from the payee's Retirement Income report on the Maintain Ret Allow Data JPN page.

The system uses this information when it calculates the deduction amount of the retirement allowance and the taxes on the current retirement allowance. This step is required whether or not the payee has submitted a Retirement Income report.
Using the Off Cycle component to enter the payee's current retirement allowance earning as an unscheduled payment.
If applicable, entering the payee's date of death on the Biographical Details page in the Administer Workforce business process in PeopleSoft Enterprise Human Resources.
Running an off-cycle process for retirement allowances.
Printing payslips.
Generating the Retirement Allowance Withholding Tax report.

Entering Retirement Allowance Data

This section discusses how to enter years of service and data from an employee's Retirement Income report.

Page Used to Enter Retirement Allowance Data

Page Name	Definition Name	Navigation	Usage
Maintain Ret Allow Data JPN	GPJP_RA_PYE_DATA	Global Payroll & Absence Mgmt, Payee Data, Terminations, Maintain Ret Allow Data JPN, Maintain Ret Allow Data JPN	Enter data that is used to calculate a payee's withholding tax on a retirement allowance.

Entering Retirement Allowance Data

Access the Maintain Ret Allow Data JPN page (Global Payroll & Absence Mgmt, Payee Data, Terminations, Maintain Ret Allow Data JPN, Maintain Ret Allow Data JPN).

Effective Date

Enter the payee's retirement date.

Date of Death

This field appears only if the payee's date of death is entered on the Biographical Details page in Administer Workforce. It is used with the Period End Date field.

Retirement by Disability

Select if the retirement is due to disability.

Retirement Income Report Submitted

Select if the payee submitted a Retirement Income report to your organization. If this check box is deselected, the system applies an income tax rate of 20 percent to the gross amount of the retirement allowance.

Submit to Tax Office

This check box is used when printing the Legal Payment Summary report. If selected, the payee's earnings and withholding tax are included in the figures that are reported as submitted to the tax office.

Years of Service

Period Begin Date	The system displays the payee's hire date or rehire date by default (as defined on the Job Information page). You can enter a different date.
Period End Date	The system displays the payee's termination date by default (as defined on the Job Information page). You can enter a different date. If a date of death is displayed on this page for the payee, and that date matches the period end date, the system considers the retirement allowance as paid due to the payee's death and calculates income tax and inhabitant tax as zero. It also excludes the retirement allowance from the Retirement Allowance Withholding Tax Report.
Years of Service	The system calculates and displays the number of years of service based on the difference between the period begin date and period end date. You can manually enter a number in this field by using the Override check box.
Override	To manually enter the years of service, select this check box to make the Years of Service field editable.

Former Retirement Allowance Paid in Same Year

Complete the fields in this group box using the data that the employee reported on the Retirement Income report. The system references the data in these fields when it calculates taxes on the retirement allowance.

Other Retirement Allowance Paid in Last 5 Years

If an employee works in two different organizations simultaneously, retirement allowance deductions should be made for only one instance in the overlapping period.

Entering and Processing Retirement Allowances

This section discusses how to enter and process retirement allowances. When the system processes a retirement allowance, it automatically calculates the related income tax and inhabitant tax, based on information entered on the Maintain Ret Allow Data JPN page.

To enter processing instructions:

Create a calendar for an off-cycle run, using the following settings:
- Payee Selection = All Payees with....
- Additional Criteria = Positive Input.
Create an off-cycle request that specifies which employees are to receive a retirement allowance and the amount of each allowance:
1. Access the Off Cycle Requests component (GP_OFFCYCLE_SETUP) for the appropriate pay group and target period.
2. On the Main page, enter a description and payment date.
3. On the Unscheduled Payments page: Period tab, enter a row for each employee who is to receive a retirement allowance.
4. On the Unscheduled Payments page: Associated Data (Links) tab, click the P.I. for Target Calendar link to access an employee's Positive Input page.
5. On the Positive Input page: Action tab, select the delivered earning element for retirement allowance, ER RET ALW, and select an action type of Override.
  
  Note. If you modified the accumulator ER AC RET CUST ERN to include earnings in addition to ER RET ALW, enter the amounts for those earnings elements as well, if applicable.
6. On the Positive Input page: Main Components tab, enter the amount of the retirement allowance for ER RET ALW.
7. Repeat step d through f for each employee that is to receive a retirement allowance.
Create an off-cycle calendar group using the Calendar Group component (GP_CALENDAR_RUN).

When creating the off-cycle calendar group, select the Off cycle check box and specify the pay group, period ID, and off-cycle group to process.
Run the process.

Use the Payroll/Absence Run Control page to run the off-cycle process.

See Also

Managing Off-Cycle Payments

Setting Up Payslips for Retirement Allowances

You can create a payslip template for retirement allowances. For each pay group, assign the template to the retirement allowance run type.

See Also

Generating Payslips

Running the Retirement Allowance Withholding Tax Report

This section provides an overview of the Retirement Allowance Withholding Tax Report and discusses how to run the report.

Understanding the Retirement Allowance Withholding Tax Report (GPJP_RA_WH)

The Retirement Allowance Withholding Tax report is a comma separated value (csv) file that reports the tax amounts withheld from payees' retirement allowances. For each payee, the report lists the payee's name, address, earnings amount of the retirement allowance, income tax, municipality tax, and prefecture tax. It also lists the employee's years of service, hire date, retirement date, and municipality code. It does not include retirement allowance paid due to a payee's death.

You can edit and print the file with Microsoft Excel.

Prerequisite

Before you can generate the Retirement Allowance Withholding Tax report, you must create a file handle that specifies the exact path (including file name) for the file.

See Also

Generating Payslips

Page Used to Run the Retirement Allowance Withholding Tax Report

Page Name	Definition Name	Navigation	Usage
Create Ret Allow WT RPT JPN (create retirement allowance withholding tax report Japan)	GPJP_RC_RA_WH	Global Payroll & Absence Mgmt, Termination Processing, Create Ret Allow for WT RPT JPN, Create Ret Allow WT RPT JPN	Creates a file that reports the tax amounts withheld from retirement allowances.

Effective Date	Enter the payee's retirement date.
Date of Death	This field appears only if the payee's date of death is entered on the Biographical Details page in Administer Workforce. It is used with the Period End Date field.
Retirement by Disability	Select if the retirement is due to disability.
Retirement Income Report Submitted	Select if the payee submitted a Retirement Income report to your organization. If this check box is deselected, the system applies an income tax rate of 20 percent to the gross amount of the retirement allowance.
Submit to Tax Office	This check box is used when printing the Legal Payment Summary report. If selected, the payee's earnings and withholding tax are included in the figures that are reported as submitted to the tax office.