Understanding YEA

Global Payroll for Japan provides rules that satisfy statutory and business requirements for calculating and reporting YEA on the final salary or bonus payment. In addition, it provides rules for calculating and reporting independent YEA when an event that affects a payee's annual income tax occurs after the YEA adjustment.

When you run the YEA process on the final salary or bonus, the system calculates for each payee the difference between income tax that is withheld and the income tax on actual earnings and settles this tax difference in the final payment of the year. For independent YEA processing, where the tax difference represents an underpayment of income tax, the system carries over the tax difference as a deduction to be taken in the first payment of the following object year. If the tax difference represents excess withholding of income tax, the excess amount is refunded to the payee at year end. You can carry over this amount to the next year.

This section discusses:

• Delivered YEA elements.

• Viewing delivered elements.

• Tax difference carryover for independent YEA.

• YEA reports.

• Self-service YEA data collection.

• YEA data collection through printed reports.