Create a Legal Entity Calculation Card

This topic demonstrates how you can create a calculation card at the legal entity level. The calculation card captures information for the organization at the legislative level, you can override this information at the TRU-level.

Use the Manage Legal Entity Deduction records task to create the card.

A legal entity statutory deductions card captures the individual income tax management information specific to a territory. It also specifies the social security management information specific to a territory and hukou type. The values entered in the Enterable Calculation Values on Calculation Cards tab on the legal entity statutory deductions card replaces the values defined at the legislative level.

Perform these tasks to create a legal entity calculation card for China:

• Create the Calculation Card

• Define the Individual Income Tax Calculation Components

• Define the Public Housing Fund Calculation Components

• Define the Social Insurance Calculation Components

How to Create the Calculation Card

1. In the Setup and Maintenance work area, do the following:

   • Offering: Workforce Deployment

   • Functional Area: Enterprise Structures

   • Task: Define Legal Entities for Human Capital Management

   Expand the entry to display a list of related tasks.

2. Click the Select link for the Legal Entity Calculation Cards task.

3. On the Select Scope window, select Select and Add from the Legal Entity list.

4. Click Apply and Go to Task.

5. On the Select and Add: Legal Entity page, search for and select the legal entity and click Save and Close.

6. Click Go to Task for the Legal Entity Calculation Cards task.

7. Click Create.

8. On the Create Calculation Card dialog box, do the following:

   • In the Effective As-of Date field, enter a date.

   • From the Name list, select Statutory Deductions.

9. Click Continue.

How to Define the Individual Income Tax Calculation Components

1. Select Taxes from the Components Groups in the Calculation Card Overview section.

2. Click Create in the Calculation Components section.

3. On the Create Calculation Component page, do the following:

   • From the Calculation Component list, select Individual Income Tax.

   • From the Territory list, select a territory.

4. Click OK.

5. In the Individual Income Tax: Details section, on the Enterable Calculation Values on Calculation Cards tab, click Create. Select the name of the override you want to create and then enter the overriding value. This table lists the overrides allowed for individual income tax management at the payroll statutory unit level.

   OVERRIDE NAME	DESCRIPTION	VALUE TYPE	VALUE EXAMPLE
   Severance Payments Tax Exemption	Severance payments tax exemption amount for mainland China citizens who work and get paid in China.	Total amount	168183.00
   Severance Payments Tax Exemption for Seaman	Severance payments tax exemption amount for mainland China seamen who work overseas and get paid in China.	Total amount	168183.00
   Severance Payments Tax Exemption for Hong Kong, Macao, and Taiwan	Severance payments tax exemption amount for Hong Kong, Macao, and Taiwan residents who work in China.	Total amount	168183.00

6. Click Save.

How to Define the Public Housing Fund Calculation Components

1. Select Social Security from the Components Groups in the Calculation Card Overview section.

2. Click Create in the Calculation Components section.

3. On the Create calculation component page, do the following:

   • from the Calculation Component list, select Public Housing Fund.

   • From the Territory list, select a territory.

4. Click OK.

5. In the Public Housing Fund: Details section, click Create.

6. On the Create Calculation Component Details dialog box, from the Calculation Component Details list, select Contribution Base Information and click OK.

7. In the Public Housing Fund: Details section, on the Calculation Component Details tab, click Contribution Base Information and complete these fields:

   Field	Value
   Switch Period Type	Select Yearly in a specified month if the contribution base is recalculated once a year, or select Monthly if the contribution base is recalculated every month
   Switch Month	Select a month if the base is recalculated yearly, or select Not applicable if the base is recalculated every month
   Employee Base Calculation method	Select an employee base calculation method
   Employer Base Calculation method	Select an employer base calculation method
   Lower Limit Calculation Method	Select a lower limit calculation method
   Upper Limit Calculation Method	Select an upper limit calculation method
   Rounding Method	Select a rounding method

8. On the Enterable Calculation Values on Calculation Cards tab, click Create. Select the name of the override you want to create and then enter the overriding value. This table lists the overrides allowed for public housing fund management at the payroll statutory unit level. Because these values vary by territory, no default values are provided for any of the items in this table. They are all set to zero at the legislative value.

   OVERRIDE NAME	VALUE TYPE	VALUE EXAMPLE
   City Average Monthly Salary in Previous Year	Total amount	4101.00
   City Lowest Average Monthly Salary in Previous Year	Total amount	860.00
   Provincial Average Monthly Salary in Previous Year	Total amount	-
   Employee Contribution Rate	Rate	0.18
   Employee Nontaxable Contribution Threshold Rate	Rate	0.12
   Employer Contribution Rate	Rate	0.18
   Employer Nontaxable Contribution Threshold Rate	Rate	0.12
   Fixed Contribution Base Lower Limit Amount	Total amount	-
   Fixed Contribution Base Upper Limit Amount	Total amount	-
   Fixed Employee Contribution Amount	Total amount	-
   Fixed Employee Contribution Base Amount	Total amount	-
   Fixed Employee Nontaxable Contribution Threshold Amount	Total amount	-
   Fixed Employer Contribution Amount	Total amount	-
   Fixed Employer Contribution Base Amount	Total amount	-
   Fixed Employer Nontaxable Contribution Threshold Amount	Total amount	-
   Nontaxable Contribution Base Threshold Amount	Total amount	12303.00

9. Click Save and Close.

How to Define the Social Insurance Calculation Components

Before you define the social insurance calculation components, consider the following points:

• You can add social insurance calculation components and component details to the statutory deductions card. You can add calculation components for these social insurance types to a legal entity statutory deductions card:

  • Basic Pension Insurance

  • Basic Medical Insurance

  • Supplementary Medical Insurance

  • Unemployment Insurance

  • Maternity Insurance

  • Work-Related Injury Insurance

• For maternity insurance and work-related injury insurance, you define only the employer contribution; there is no corresponding employee contribution

• For supplementary medical insurance, maternity insurance, and work-related injury insurance, taxable contribution calculation isn't required

1. Select Social Security from the Components Groups in the Calculation Card Overview section.

2. Click Create in the Calculation Components section.

3. On the Create calculation component page, do the following:

   • From the Calculation Component list, select a social insurance type.

   • From the Territory list, select a territory.

4. Click OK.

5. In the Details section of the selected social insurance type, click Create.

6. On the Create Calculation Component Details dialog box, from the Calculation Component Details list, select Contribution Base Information and click OK.

7. In the Details section of the selected social insurance type, on the Calculation Component Details tab, click Contribution Base Information and complete these fields:

   Field	Value
   Switch Period Type	Select Yearly in a specified month if the contribution base is recalculated once a year, or select Monthly if the contribution base is recalculated every month
   Switch Month	Select a month if the base is recalculated yearly, or select Not applicable if the base is recalculated every month
   Employee Base Calculation method	Select an employee base calculation method
   Employer Base Calculation method	Select an employer base calculation method
   Lower Limit Calculation Method	Select a lower limit calculation method
   Upper Limit Calculation Method	Select an upper limit calculation method
   Rounding Method	Select a rounding method

8. On the Enterable Calculation Values on Calculation Cards tab, click Create. Select the name of the override you want to create and then enter the overriding value.

9. Click Save and Close.