Australia’s new tax solution


In July 2015 SAP released its new Tax solution to all its Australian customers after piloting it for around 10 months with a select few early adopters. So what prompted SAP to redesign the Tax part of the solution? The old solution, as per SAP, built on old development standards and non-optimised code was difficult to maintain resulting in numerous customer support tickets being raised with SAP. The pilot program yielded good results with a rigorous testing of more than 2000 test cases across the 20 odd customers. The success of the solution meant that SAP would stop supporting the old solution beyond June 2017.

What’s changing?

The new solution built on latest development standards uses new configuration based tables and new functions to simplify the tax calculation. Although the tax amount remains unchanged across the two solutions, the process of arriving at the final value however has undergone changes. From a debugging perspective, the simplified payroll log is crisp and well-structured.
The primary schema Q000 (QPS0 for Public Sector) has been replaced by a new schema Q001 (QPS1 for Public Sector). Few standard schemas – QAL0, QNET, QRR0, QLVP and QEND – have had lines removed and new lines added to accommodate the new payroll functions. The major schema change has been the tax calculation schema QTAX. This, over 360 lines of schema has now a slimmer version QNTX, which has just 17 lines.
Along with new PCRs and modified standard PCRs, the new design has also made changes to technical wage types. While there are few new wage types, some of the older technical wage types have undergone changes to their processing class specifications.
Below are some of the major changes in the new design:
New Tax Design

How to implement

When customers decide to change, they need to get an activation note from SAP. Installing this note is followed by activation of an irreversible business function. Next up is copying the existing schema customisations (if any) into the new schemas – Q001, QAL1 etc. The new tables (V_T5QT1, V_T5QT3, V_T5QT5, V_T5QT6 and V_T5QR0) do not need to be configured as SAP pre configures them with the standard technical wage types unless changes have been made to the standard wage types by the customer.
Some of the standard personnel calculation rules (PCRs) have undergone changes which means any customisations made by the customer needs to be redone in the copies of the changed PCRs. There are changes to few model wage types implying that the customer needs to check the wage types which were copied from these and make appropriate changes manually. Before the changes move to the productive environment, care needs to be taken to change all variants and scheduled jobs to reflect the new schema.
SAP suggests two ways of implementation – apply the appropriate support pack OR apply the changes via a mini project. Whichever method the customer decides it needs to be supported by sufficient testing.

How to test the changes

Technically the tax value remains unchanged across the solutions which means the focus of testing should be around the various customisations. Therefore the testing effort is influenced by the extent of customisation. The test environment should be as close to the production in terms of the master data for best results.
The tax calculation should be part of the success criteria. Testing of the tax values should be done for regular as well as retro scenarios (retro from a period where old solution was active is a good test case). Bonus, super, leave loading are other areas where the new solution must be tested. Testing of the payslips, end of year reports and accounting completes the testing cycle.
Payroll parallel testing is a common strategy to compare results across the solutions. The wage type reporter is a useful tool in identifying differences.

SAP Support

SAP has provided extensive reference material to help migrate to the new solution. These can be found at The Implementation guides, webinars, FAQs and more can be found at this link making the migration easier.
KALTech is a leader in SAP HR and Payroll. We understand Payroll from a business, operational and technical perspective with extensive experience and skilled consultants too. For more information about SAP’s tax re-design or for implementation assistance, contact us at KALTech.
SAP SuccessFactors Consultant

This entry was posted on June 10th, 2016.