Understanding Termination Processing of Global Payroll for Thailand

PeopleSoft Global Payroll for Thailand provides different types of termination incomes and processing methods for the following types of terminated payees:

  • Terminated payees with a length of service (LOS ) of five years or more.

  • Terminated payees with a length of service less than five years.

Termination can be processed by normal cycle or off cycle processing. However, if payees receive termination income after their final regular pay period, the termination can only be processed by off cycle processing.

The termination calculation is processed in the same process list as the normal cycle payroll process.

PeopleSoft Global Payroll for Thailand supports two options for annual income projection by setting the variable TAX VR PROJ. A value of E for the variable means that the system requires the projection for the remaining periods of this tax year. However, if the value of the variable is T, then the projection for the remaining periods is zero.

Managing Termination Taxes

Global Payroll for Thailand supports the following termination tax types:

  • Withholding.

  • Gross up one cycle.

  • Gross up all cycles.

You can specify the tax type for each termination income through positive input.

Global Payroll for Thailand also enables you to track the termination tax calculation easily using the Termination Tax Log functionality. The termination tax log is similar to the tax log reporting used for normal payroll processing. To enable the termination tax log functionality, you can use the Supporting Elements Overrides page to change the value of the TAX VR LOG FLAG variable to Y.

If the LOS of a terminated payee is greater than or equal to five years, PeopleSoft Global Payroll for Thailand provides the following termination incomes for processing:

  • Government pension (TER ER GP).

  • Provident fund/government pension fund (TER ER PF).

  • Severance pay (TER ER SP).

  • One time payment (TER ER LC).

Payees can receive termination incomes multiple times within a single tax year.

You can use Positive Input to enter the amount of the termination income.

When the terminated payee's LOS is five years or more, the system supports the following termination tax types:

  • Withholding.

  • Gross up one cycle.

  • Gross up all cycles.

If the LOS of a terminated payee is less than five years, Global Payroll for Thailand processes the termination income as normal irregular income. The total amount of the termination income is entered in TER IR EARN through Positive Input, and the tax calculation method should be specified on the Positive Input page.

Only the ITF reports can be generated for the termination calculation processing in this situation, the system does not support generating the PIT91 Attachment reports.

When the terminated payee's LOS is less than five years, the system supports the following termination tax types:

  • Withholding.

  • Gross up one cycle.

  • Gross up all cycles.

Global Payroll for Thailand provides ITF reports and the PIT91 attachment report for termination.

Global Payroll for Thailand delivers the following primary elements for termination processing:

Element Name

Description

TER ER GP

Earning element for government pension.

TER ER PF

Earning element for provident fund/government pension fund.

TER ER SP

Earning element for severance pay.

TER ER LC

Earning element for one time payment.

TER IR EARN

Termination earnings for terminated payees with length of service less than 5 years.

PeopleSoft Global Payroll for Thailand delivers the following supporting elements for termination processing:

Element Name

Description

TAXABLE EARNINGS

Section for calculating termination earnings and other taxable earnings.

TER TAX CAL

Section for termination calculation.

TER FM CHECK

Condition check formula for the termination tax calculation section.

TAX BR TER RATE

Bracket for the termination income tax rate.

TER HR AVG SAL

This historical rule retrieves the salary for the last month and the average salary of the last 12 months.

Processing Order of Termination Income

The order of processing of termination income is determined by the variable TAX VR CAL TER ORD. The default value is:

  1. TER ER GP

  2. TER ER PF

  3. TER ER SP

  4. TER ER LC

You can override the default value according to your business needs by accessing the payroll earnings elements Supporting Elements Overrides page (Set Up HCM > Product Related > Global Payroll & Absence Mgmt > Elements > Payroll Elements > Earnings > Supporting Element Overrides).

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Global Payroll for Thailand. Instructions for running the query are provided in the PeopleSoft Global Payroll documentation.