Preparing Year-End Adjustment

This chapter provides an overview of year-end adjustment (YEA) and discusses how to:

Print the Dependent Deduction report and the Insurance and Spouse Special Deduction report.
Enter deduction data for YEA.
Prepare for YEA reporting.
Run YEA reports.

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 and 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 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 carry-over for independent YEA.
YEA reports.
Self-service YEA data collection.
YEA data collection through printed reports.

Delivered YEA Elements

Global Payroll for Japan delivers these elements for processing year-end adjustments:

Deduction elements YE TAX DIF and YE TXDIF CY.

YE TAX DIF represents the tax difference amount that the system calculates during YEA processing. YE TX DIF CY represents the tax amount difference that is carried over to the next year for employees subject to independent YEA processing.
Process lists, JPRADJSAL, JPRADJBON, and JPRADJIND.

Use the applicable payroll process list to run the YEA process for salary or bonus, or for independent YEA adjustments.

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 8.9 PeopleBook.

Tax Difference Carry Over for Independent YEA

When the tax difference calculated for an independent YEA represents an underpayment of income tax, the system uses the deduction element, YE TXDIF CY, to carry over the difference to the next object year. When you run the regular payroll process for January (using process list JPRSAL), the system deducts the amount from the payee's earnings. If the tax difference is greater than the payee's earnings in January or cannot be deducted from the January salary, the tax difference is carried over to the next month, until the deduction is taken.

By default, refunds are not carried forward but are paid to employees in the last payment of the year. To carry over refunds, set the value of variable YE VR CYOVR FLG to 1 (one).

The system reports the tax difference that is carried over on the YEA payslips, the Withholding Tax Register report, and the Tax Difference Carried Over from the Previous Year report.

YEA Reports

After year-end adjustments are complete and you prepare your data tables, you can generate these reports to complete the YEA business process:

Withholding Tax report (GPJPYE01).
Wage Payment report (GPJPYE01).
Legal Payment Summary report (GPJPYE02).
Wage Payment Summary report (GPJPYE03).
Tax Difference Carried Over from the Previous Year report (GPJPYE06).

Self-Service YEA Data Collection

Global Payroll for Japan supports both a paper exchange method and a self-service method for collecting YEA data from employees.

If your organization licenses PeopleSoft Enterprise ePay and PeopleSoft Enterprise eProfile, you can collect YEA data from employees through self-service pages. The process for collecting and reviewing self-service YEA data includes these steps:

The payroll administrator specifies the time period in which employees can update data through the self-service transaction.
Employees access a main YEA Information page in ePay.

From that page, they access other pages where they can review and update this YEA data:
- Employee tax information, such as head of household and disability information.
- Employee personal data information, such as name, address, and birth date. (Available only if your organization also licenses eProfile.)
- Dependent tax information, such as relationship and disability types.
- Life insurance and personal pension insurance information.
- Nonlife insurance, social insurance, and small enterprise mutual aid insurance information.
- Spouse special deduction information.
- Housing loan special deduction information.
Payroll administrators review the data and accept it or notify the employee to revise it.
(Optional) The payroll administrator prints the Dependent Deduction report and Insurance and Spouse Special Deduction report for record-keeping purposes.

YEA Data Collection Through Printed Reports

Payroll administrators perform the following steps to collect YEA data using printed reports:

Print and distribute the following two forms on which employees manually enter their YEA data:
- Dependent Deduction report.
- Insurance and Spouse Special Deduction report.
Collect the completed forms from employees.

Use these forms to enter data into Global Payroll for Japan income tax and YEA tables.

Retain the completed forms for record-keeping purposes.

Printing the Dependent Deduction Report and the Insurance and Spouse Special Deduction Report

This section provides an overview of the Dependent Deduction report and the Insurance and Spouse Special Deduction report, lists common elements, and discusses how to:

Run the Dependent Deduction report.
Run the Insurance and Spouse Special Deduction report.

Understanding Dependent Deduction and Insurance and Spouse Deduction Reports

The data collection method that you use determines when you run these reports and what they contain.

Data Collection Through Printed Reports

Use these reports to collect the data that you later enter into the system manually:

Dependent Deduction report.

This report prints the current employee and dependent information, which the employee can modify if there is a correction or update.
Insurance and Spouse Special Deduction report.

This report prints the basic employee information only. Employees must fill out the form and submit it as proof of the declaration of their special deduction information even when they have nothing to declare.

For record-keeping purposes, you can retain the reports submitted by employees.

Self-Service Data Collection

With self-service data collection, you can print the reports for record-keeping purposes after employees have updated their data. The reports gather data from the tables on which the self-service data is stored in the system.

Common Elements Used in This Section

Print Options	Select the Print Bus Unit and Location check box to print the business unit and location on the report. This information appears at the bottom of the report.
Sort Order	Select the sort order in which you want the report to print. Options include Business Unit, Location Code, Department, and Supervisor Level ID.

Pages Used to Run the Dependent Deduction and Insurance and Spouse Special Deduction Reports

Page Name	Object Name	Navigation	Usage
YEA Dependent Deduction (year-end adjustment dependent deduction)	GPJP_RC_YEA04	Global Payroll & Absence Mgmt, Year-End Processing, Report YEA Dependent Ded JPN, YEA Dependent Deduction	Run the Dependent Deduction report (GPJPYE04). For manual data collection, print the report and distribute it to employees for review and update. For self-service data collection, print the report for record-keeping purposes after employees have updated their data in the ePay and eProfile transactions.
YEA Insurance and Spouse (year-end adjustment insurance and spouse)	GPJP_RC_YEA05	Global Payroll & Absence Mgmt, Year-End Processing, Report YEA Ins and Spous JPN, YEA Insurance and Spouse	Run the Insurance and Spouse Special Deduction report (GPJPYE05). For manual data collection, print the report and distribute it to employees for review and update. For self-service data collection, print the report for record-keeping purposes after employees have updated their data in the ePay transaction.
Payee List	GPJP_RC_YEA_SEC	Click the Payee List link on the YEA Dependent Deduction or YEA Insurance and Spouse page.	Select individual employees to report. Do not use this page in conjunction with other employee selection criteria.

Running the Dependent Deduction Report

Access the YEA Dependent Deduction page.

Object Year

This field determines the date for which report data is retrieved. The Dependent Deduction report is based on information as of the last day of the object year. So, if you enter 2004 in this field, the report is based on data that was in effect on December 31, 2004.

The exception to this rule is the payee's address, which is retrieved as of the first date of the object year. So, if the object year is 2004, the as of date for the address is January 1, 2004.

Running the Insurance and Spouse Special Deduction Report

Access the YEA Insurance and Spouse page.

Object Year

If ePay is not installed, this field determines the date for which report data is retrieved. The Insurance and Spouse Special Deduction report is based on information as of the last day of the object year. So, if you enter 2004 in this field, the report is based on data that was in effect on December 31, 2004.

If ePay is installed, the system uses the date entered in the As of Date field on the Year End Adjustment Self Service Setup page to retrieve data for the report.

YEA Status

This group box appears only if ePay is installed. Select the appropriate status for the year-end adjustment: Submitted, Approved, or Sent to Payroll.

Entering Deduction Data for YEA

This section provides overviews of entering deduction data for YEA and manual adjustments for multiple jobs, and discusses how to:

Load self-service insurance, spouse, and housing special deduction data.
Edit YEA type.
Enter prior employment data.
Enter employee tax deduction data collected by reports.
Enter dependent tax deduction data collected by reports.

Understanding Deduction Data Entry for YEA

Before processing the YEA reports, you must enter deduction information for YEA into the GPJP_YEA_PYEADJ table and ensure that data in the GPJP_IT_PYE_TAX and GPJP_IT_DEP_TAX tables is up-to-date.

Much of this data is collected through either the self-service or the manual method of YEA data collection. The method of entering the data differs according to the collection method.

Note. Even if you use data collected through the self-service pages, you must still access the YEA Adj Data (year-end adjustment data) page if you need to edit the employee's YEA type. You must also access the Prior Employment page to enter prior employment data.

This table lists how the tables for each method of data collection are updated:

Data and Payroll Table Loaded	Self-Service Method	Manual Method
Employee tax deduction data on (GPJP_IT_PYE_TAX)	Automatically updated when the employee saves information entered on the Employee Tax Information self-service page.	Collected on the Dependent Deduction report and manually entered on the Income Tax Data page (GPJP_IT_PYE_TAX).
Dependent tax deduction data on (GPJP_IT_DEP_TAX)	Automatically updated when the employee saves information entered on the Edit Dependent Tax Information self-service page.	Collected on the Dependent Deduction report and manually entered on the Dependent Tax Data page (GPJP_IT_DEP_TAX).
Insurance, spouse, and housing loan special deduction data on (GPJP_YEA_PYEADJ)	Run the Load YEA Self Service Data process (GPJP_YEASSLD), which loads data that is entered by employees on the Employee Personal Information and insurances and deductions self service pages.	Collected on the Insurance and Spouse Special Deduction report and manually entered on the YEA Adj Data page (GPJP_YEA_PYEADJ).

Understanding Manual Adjustments to YEA Data for Multiple Jobs

When an employee has multiple jobs, YEA report data is loaded for each employment record independently. The data is always loaded using the tax type that was in effect as of the payment date for the year-end adjustment process. When the tax type changes during the year, you may need to make a manual adjustment on the Prior Employment page so that the system bases the year-end adjustment and Withholding Tax report on the proper salary amount.

Example: Employee is Paid from One Employment Record Each Month

As an example, assume that an employee's salaries were paid from Empl Rec Nbr 0 (employment record number 0) for every month except May through August when salaries were paid from Empl Rcd Nbr 1 as shown in this table:

Empl Rcd #

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Kou

Assume that the payment date is December 30. Because the employee's tax type as of this date is Kou, as long as the employee meets other conditions required for the year-end adjustment, the adjustment is processed on Empl Rec Nbr 0. The year-end adjustment is based on the salaries paid for Empl Rec Nbr 0 from January to April and from September to December, and the Withholding Tax report is printed.

To include salaries paid from May to August for Empl Rcd Nbr 1 in the year-end adjustment purposes, you must access the Prior Employment page for Empl Rcd Nbr 0 and enter the salaries and deductions for Empl Rcd Nbr 1 before you run the year-end adjustment process for Empl Rec Nbr 0.

Pages Used to Enter Deduction Data for YEA

Page Name	Object Name	Navigation	Usage
Load YEA Self Service (load year-end adjustment self service)	GPJP_RC_YEALOAD_SS	Global Payroll & Absence Mgmt, Year-End Processing, Load YEA Self Service Data JPN, Load YEA Self Service	Load self-service deduction data. Payroll administrators run the Load YEA Self Service process (GPJP_YEASSLD) to load updated self-service employee personal data, life and non-life insurance, and spouse and housing loan deduction information into the YEA Adj Data table and the corresponding page (GPJP_YEA_PYEADJ).
Payee List	GPJP_RC_YEA_SEC	Click the Payee List link on the Load YEA Self Service page.	Select individual employees to load their data.
YEA Adj Data (year-end adjustment data)	GPJP_YEA_PYEADJ	Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Year-End Adj Data JPN, YEA Adj Data	Enter deduction data (housing acquisition deduction, insurance, and spouse deduction) and edit YEA type. Indicate whether employees are subject to adjustment.
Prior Employment	GPJP_YEA_PYEPRI	Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Year-End Adj Data JPN, Prior Employment	Enter income, tax, and social insurance premium data from prior employment with prior employer’s name and address.
Income Tax Data	GPJP_IT_PYE_TAX	Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Income Tax Data JPN, Income Tax Data	Enter the salary payer number and employee tax deduction information that is collected by report, such as employee type and disability type.
Dependent Tax Data	GPJP_IT_DEP_TAX	Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Dep Tax Data JPN, Dependent Tax Data	Enter spouse or dependent deduction information that is collected by report, such as dependent type and disability type.

Loading Self-Service Deduction Data

Access the Load YEA Self Service page.

See Loading YEA Self-Service Deduction Data.

Entering YEA Deduction Data and Editing YEA Type

Access the YEA Adj Data page.

YEA Type (year end adjustment type)

Select a value to indicate whether the employee is subject to income tax adjustment. The default is Subject. Select Not Subject to exclude the employee from the YEA process.

Entering Prior Employment Data

Access the Prior Employment Data page.

Use this page to enter earning and deduction data from previous employers.

Entering Employee Tax Deduction Data Collected by Report

Access the Income Tax Data page.

See Also

Preparing for Income Tax Withholding

Entering Dependent Tax Deduction Data Collected by Report

Access the Dependent Tax Data page.

See Also

Preparing for Income Tax Withholding

Preparing for YEA Reporting

This section provides an overview of YEA report data preparation and discusses how to:

Update municipality codes and recipient numbers.
Load the YEA report data.
View and update the YEA data table.

Understanding YEA Report Data Preparation

The Load YEA Table Application Engine process (GPJP_YEALOAD) loads an intermediate table that contains most of the data necessary for these reports: Withholding Tax, Wage Payment, Legal Payment Summary, and Withholding Tax Register.

Regardless of whether you use the self-service or manual method of collecting data, follow this sequence when preparing to report YEA data:

Update employee addresses if necessary.

If you collect YEA data through self-service transaction, you accomplish this step using the Employee Personal Information page and the Load YEA Self-Service Data process (GPJP_YEASSLD).
Run the Pre-Load Inhabitant Tax process (GPJP_IHMUN1) to preload municipality codes to the Inhabitant Tax table.
Update employee recipient numbers, if necessary, on the Inhabitant Tax Data page.
Run the Load YEA Report Data process (GPJP_YEALOAD).
Update the Submit to Tax Agent indicator and edit the summary, if necessary, on the YEA Report Data page.

Pages Used to Prepare for YEA Reporting

Page Name	Object Name	Navigation	Usage
Pre-load Inhabitant Tax	GPJP_RC_IH_MUN1	Global Payroll & Absence Mgmt, Taxes, Pre-Load Inhabitant Tax JPN, Pre-load Inhabitant Tax	Update the municipality codes and recipient numbers by running the Pre-Load Inhabitant Tax process (GPJP_IHMUN1), which loads the employee, municipality, and recipient numbers for the object year into the Inhabitant Tax table.
Inhabitant Tax Data	GPJP_IH_PYE_TAX	Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Inhab Tax Data JPN, Inhabitant Tax Data	View and correct recipient numbers after running the Pre-Load Inhabitant Tax process.
Load YEA Report Data (load year-end adjustment report data)	GPJP_RC_YEALOAD	Global Payroll & Absence Mgmt, Year-End Processing, Load YEA Report Data JPN, Load YEA Report Data	Load the YEA report data.
YEA Report Data (year-end adjustment report data)	GPJP_YEA_TABLE	Global Payroll & Absence Mgmt, Year-End Processing, Rvw/Update YEA Report Data JPN, YEA Report Data	View and update the YEA Data table. View results of the YEA Data Load process and update the Submit to Tax Agent indicator and Summary field.

Updating Municipality Codes and Recipient Numbers

Access the Pre-load Inhabitant Tax page.

Note. You must update and audit employee addresses and the postal code table before preloading data.

See Setting Up the Inhabitant Tax Table.

Loading YEA Report Data

Access the Load YEA Report Data page.

EmplID (employee ID)

If you select an employee ID, the process updates the row of data for the selected employee only.

Note. To load YEA data for terminated employees, access the process through the Termination Processing menu path.

See Also

Processing Terminations

Viewing and Updating the YEA Report Data Table

Access the YEA Report Data page.

Submit to Tax Office

The system selects this check box if the KOU-type employee's gross income is over 5 million yen or OTSU-type employee's gross income is over 500,000 yen (formula YE FM SUBMIT). The system does not verify whether the employee is an officer, is retired, or any of the other criteria for determining whether to submit the Withholding Tax report to the tax office.

Summary

The system enters deductible spouse and dependent identification, prior employment data, special tax reduction data, and the beginning date of residence (for employees who receive the housing acquisition special deduction). You can edit this data.

Because of length limitations, the entire summary might not appear on the printed reports.

Running Year-End Reports

This section discusses how to:

Run the Withholding Tax report.
Run the Wage Payment report.
Run the Legal Payment Summary report.

Note. Before running these reports, run the Load YEA Report Data process.

See Also

Processing Terminations

Pages Used to Run Year-End Reports

Page Name	Object Name	Navigation	Usage
W/H Tax Report (withholding tax report)	GPJP_RC_YEAWHRPT	Global Payroll & Absence Mgmt, Year-End Processing, Withholding Tax Report JPN, W/H Tax Report	Run the Withholding Tax report (GPJPYE01).
Wage Payment Rpt (wage payment report)	GPJP_RC_YEAWGRPT	Global Payroll & Absence Mgmt, Year-End Processing, Wage Payment Rpt JPN, Wage Payment Rpt	Run the Wage Payment report (GPJPYE01).
Legal Payment Rpt (legal payment report)	GPJP_RC_YEA	Global Payroll & Absence Mgmt, Year-End Processing, Legal Payment Summary Rpt JPN, Legal Payment Rpt	Run the Legal Payment Summary report (GPJPYE02).
Wage Pmt Summary (wage payment summary)	GPJP_RC_YEA	Global Payroll & Absence Mgmt, Year-End Processing, Wage Payment Summary Rpt JPN, Wage Pmt Summary	Run the Wage Payment Summary report (GPJPYE03).
Tax Difference Carry Over JPN	GPJP_RC_IT_TXDIF	Global Payroll and Absence Mgmt, Year-End Processing, Tax Difference Carry Over JPN	Run the Tax Difference Carried Over from the Previous Year report (GPJPYE06).

Running the Withholding Tax Report

Access the W/H Tax Report page.

Employees

All Employees: Select to deliver the report to all employees after YEA has been processed.

Submit to Tax Agent Employees: Select to deliver the report to tax agencies for employees who fall into specific criteria.

Note. To run the report for terminated employees, use the page in the Termination Processing menu.

Running the Wage Payment Report

Access the Wage Payment Rpt page.

Deliver this report to municipalities after YEA has been processed. Municipal Code and Recipient Number are optional parameters. Use these to restrict the output.

Running the Legal Payment Summary Report

Access the Legal Payment Rpt page.

This report displays amounts from the withholding tax reports for salary and bonus, as well as amounts from the retirement allowance withholding tax reports.