Managing TFR Termination Payments

This chapter discusses how to:

Click to jump to parent topicProcessing Terminations

Entering the termination action on the Job component triggers the termination process. The system processes the termination payment the month after the termination date. In Italy, terminated employees receive TFR payments (Trattamento di Fine Rapporto) that vary depending on their length of service. Employees accrue an amount for each year of employment, and the accrued amount increases each year according to the cost of living. When employees leave an organization, they receive the accrued amount, which is subject to tax.

To calculate termination pay, the system:

  1. Calculates termination payment accrual.

  2. Reevaluates the previous years' accrued TFR fund (ISTAT).

  3. Calculates applicable income and months of reference income.

  4. Manages TFR advance payments.

    Employees can receive part of their TFR entitlement before termination. In such cases, the TFR payment they receive on termination is reduced by the amount paid in advance.

  5. Calculates the payment and taxation of the accrued TFR in the month after termination (reference income, TFR tax rate, IRPEF on accrued TFR until 2000 and after 2000, and TFR Detractions).

  6. Calculates payment and taxation of the accrued TFR Reevaluation in the month after termination (TFR Reevaluation and IRPEF on Reevaluation).

  7. Calculates the taxation of other indemnities (Incentivo all'esodo, Notification payments, and Integrazione transattiva).

  8. Calculates the taxation on the increase in the TFR accrued amount, which is a flat percentage.

Note. The system calculates termination payments with the payroll, not as a separate process.

See Also

(ITA) Recording End of Employment Information for Italian Workers

Click to jump to parent topicOverriding Termination Elements

Though most termination elements are taken from existing tables, you can override the following elements on the Supporting Elements page (Global Payroll & Absence Mgmt, Payee Data, Create Overrides, Supporting Elements, Supporting Elements):

Element

Usage

TFR FM FLAGEROG

By default, TFR is paid a month after termination. If you set this element to 1, the TFR is paid in the month that employment is terminated.

TFR FM FLGTAXTFR

Set to 1 to force taxation of TFR after TFR has been paid and taxed. By default, the payroll process does not recalculate tax after the TFR is paid and taxed. However, if the tax needs to be recalculated, set this element to 1.

TFR VR RIVALPAG

Enter reevaluation to use on payment if different from calculated. For example, if you have paid the TFR before the official cost of living rate is published, you may need to adjust the TFR amount once the official rate is available.

TFR VR PCTPAGANT

Enter the percentage of the TFR fund to pay in advance. Use this variable when you want to pay TFR in advance based on a percentage of the accrued amount.

See Also

Setting Up Overrides

Click to jump to top of pageClick to jump to parent topicViewing Delivered Elements

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Italy. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll 9.1 PeopleBook.

See Also

Understanding How to View Delivered Elements

Click to jump to parent topicEntering Termination Earnings Using Positive Input

Though most termination elements are taken from existing tables, you can enter the following earnings using positive input:

Element

Description

RTRERPREAVV

Amount to pay as notification.

TFRERANTICIP

TFR advance payment.

RTRERINCESOD

Amount to pay as incentivo esodo.

RTRERINTTRAN

Amount to pay as integrazione transattiva.

Click to jump to top of pageClick to jump to parent topicPage Used to Enter Positive Input

Page Name

Definition Name

Navigation

Usage

One Time (Positive Input)

GP_PI_MNL_ERNDED

Global Payroll & Absence Mgmt, Payee Data, Assign Earnings and Deductions, One Time (Positive Input), One Time (Positive Input)

Enter additional payments related to termination payments.

See Also

Working with Positive Input

Click to jump to parent topicRunning Termination Reports

Global Payroll for Italy uses the print class KITFR on the Generic Report format for termination reports.

See Also

Setting Up and Running Generic Reports

Setting Up Print Classes and SQR Forms