Example of Creating a Calculation Card for a Payroll Statutory Unit for China

Let's look at an example that shows how to create a calculation card that captures individual income tax management information specific to a territory, and social security management information specific to a territory and hukou type. The information defined at the payroll statutory unit

This task involves these subtasks:

• Creating the calculation card

• Defining individual income tax information

• Defining public housing fund (PHF) information

• Defining social insurance information

• Defining benefits information, such as enterprise annuity (optional)

Create the Calculation Card

1. Navigate to the Setup and Maintenance work area, and open the implementation project.

2. Search for the Define Legal Entities Units for Human Capital Management task, and then expand the entry to display a list of related tasks.

3. Locate the Manage Legal Entity Calculation Cards task.

   If the legal entity you want to work with is displayed in the Selected Scope column, click the Go to Task icon for this task row and skip to step 9. Otherwise, continue with the next step.

4. In the Manage Legal Entity Calculation Cards task row, click the link in the Selected Scope column.

5. On the Select Scope window, select Select and Add in the Legal Entity field.

6. Click Apply and Go to Task.

7. On the Select and Add: Legal Entity window, search for the legal entity you want to work with and then select it in the Search Results.

8. Click Save and Close.

   The Payroll Statutory Unit page for the selected legal entity is displayed. If a calculation card already exists for this entity, it appears in the Search Results.

9. Click Create.

10. Enter the effective as-of date, and select Statutory Deductions as the name of the card.

11. Click Continue.

Define Individual Income Tax Information

1. Select Taxes in the Calculation Card Overview section.

2. Click Create in the Calculation Components section.

3. Select Individual Income Tax as the Calculation Component.

4. Select a territory, and click OK.

5. On the Enterable Values on Calculation Cards tab, click Create.

6. Select the name of the override you want to create, and then enter the overriding value.

   Here's an example of the overrides you can use for severance payment at the PSU level.

   Override Name	Sample Value	Comments
   Severance Payments Tax Exemption	168183.00	Applies to mainland China citizens who work and get paid in China. You can also define severance payment tax exemption overrides for the employee categories listed earlier.

7. Click OK.

8. Repeat steps 5-7 for each override value you want to create for this component.

9. Repeat steps 2-7 as needed to create an individual income tax component for each territory in which income tax is collected.

Define Public Housing Fund (PHF) Information

1. Select Social Security in the Calculation Card Overview section.

2. Click Create in the Calculation Components section.

3. Select Public Housing Fund as the Calculation Component.

4. Select a territory and a hukou type, and then click OK.

5. On the Calculation Component Details tab, click Create.

6. Select Contribution Base Information in the Calculation Component Details field, and click OK.

7. Complete the fields in the component details as shown in the following table:

   Field	Sample Value	Comments
   Switch Period Type	Monthly	This value causes the contribution base to be recalculated every month. If the contribution base should be recalculated once a year, select Yearly in a specified month and then select a month in the Switch Month field.
   Switch Month	Not applicable	Only applies if Switch Period Type is set to Yearly in a specified month.
   Employee Base Calculation Method	Current monthly salary
   Employer Base Calculation Method	Current monthly salary
   Lower Limit Calculation Method	City lowest average monthly salary, previous year	This requires that you create an override value for City Lowest Average Monthly Salary, as described later.
   Upper Limit Base Calculation Method	3 times city average monthly salary, previous year	This requires that you create an override value for City Average Monthly Salary, as described later.
   Rounding Method	Round to nearest yuan

8. On the Calculation Component Details tab, click Create.

9. Select Contribution Information in the Calculation Component Details field, and click OK.

10. Select the rounding methods to use when calculating the employee and employer contribution amounts.

11. Select the Enterable Calculation Values on Calculation Card tab, and click Create.

12. Select the name of the value you want to define, and then enter the value.

    You must set up PHF calculation values for the territories where you want to calculate PHF contributions; no values are predefined. Typically you would define either a contribution amount or a rate, but not both. If you define values for both, the application uses the amount and ignores the rate. Here's the list of all the values that you can define:

    • Employee Contribution Rate

    • Employee Nontaxable Contribution Threshold Rate

    • Employer Contribution Rate

    • Employer Nontaxable Contribution Threshold Rate

    • Fixed Contribution Base Lower Limit Amount

    • Fixed Contribution Base Upper Limit Amount

    • Fixed Employee Contribution Amount

    • Fixed Employee Contribution Base Amount

    • Fixed Employee Nontaxable Contribution Threshold Amount

    • Fixed Employer Contribution Amount

    • Fixed Employer Contribution Base Amount

    • Fixed Employer Nontaxable Contribution Threshold Amount

    • Nontaxable Contribution Base Threshold Amount

    • City Average Monthly Salary in Previous Year

    • City Lowest Average Monthly Salary in Previous Year

    • Provincial Average Monthly Salary in Previous Year

    Note:

    For the last three items, the contribution base calculation methods and lower and upper limit calculation methods you selected previously determine which values you must define. For example, if you selectCity lowest average monthly salary, previous year as the Lower Limit Calculation Method, then you must define a value for City Lowest Average Monthly Salary in Previous Year. If you select 3 times city average monthly salary, previous year for the Upper Limit Calculation Method, then you must also define the City Average Monthly Salary in Previous Year.

13. Click OK.

14. Repeat steps 11-13 for each calculation value you want to define for this PHF component.

15. Repeat steps 2-14 to create another PHF component for the same territory and different hukou type or for a different territory and hukou type. You should create a component for each unique combination of territory and hukou type where PHF is calculated.

Define Social Insurance Information

You must set up the rules and rates for social insurance deductions according to the policies of the territories where you process social insurance contributions; no rates are predefined. You can add calculation components for these social insurance types:

• Basic Pension Insurance

• Basic Medical Insurance

• Supplementary Medical Insurance

• Unemployment Insurance

• Maternity Insurance

• Work-Related Injury Insurance

The steps for creating social insurance components, adding component details, and defining overrides are similar to those required for public housing fund management, with two exceptions:

• For maternity insurance and work-related injury insurance, you only define 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.

To define social insurance information at this level:

1. Select Social Security in the Calculation Card Overview section.

2. Click Create in the Calculation Components section.

3. Select a social insurance component, territory, and hukou type.

4. Define component details.

5. Create overrides as required to define values that're specific to a territory and hukou type.

6. Repeat this process as needed to create components for each social insurance type and for each unique combination of territory and hukou type where the social insurance contribution is calculated.

Define Benefits Information

1. Create Benefits calculation components, such as Enterprise Annuity, as appropriate for your organization's needs. The component details and override values you provide for an Enterprise Annuity are similar to those for Social Security components.

2. Click Save and Close to save the calculation card.