What is Business Process Management BPM IRP 5

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					IRP 5 set-up and Annual Extractions GENERAL
In this benefit basics document we will discuss IRP 5 functionality under the headings of: 1. Set Up on Benefit for IRP5 generation and extraction. 2. Running of IRP5’s on benefit. 3. Annual Reconciliation Extract of IRP5’s.

1. SETUP FOR IRP5 GENERATION AND EXTRACTIONS
1.1 Database Setup In order for the IRP5 Extraction Wizard to create the correct transactions the following must be set up. This can be done via a SQL script supplied by SouthernX or manual entry into the table called “List_of_IRP5_Codes”. The data entries are Code 3696 3697 3698 Description Gross Non-Taxable Income Gross Retirement Funding Employment Income Gross Non-Retirement Income Gross Remuneration Gratuities (Retirement\Retrenchment) Pension & RA Lump Sum (Resignation) Pension & RA Lump Sum (Retirement\Death) Provident Lump Sum (Resignation) Provident Lump Sum (Retirement\Death) SITE - Standard Income Tax On Employees PAYE - Pay As You Earn Total Employees Tax Funding Retirement_Funding_Income 0 0

Employment 0

3699 3901 3902 3903 3904 3905 4101 4102 4103

0 0 0 0 0 0 0 0 0

(Retirement_Funding_Income 0 = No and 1 = Y.)

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IRP 5 set-up and Annual Extractions
1.2 1.2.1 Benefit Setup Setting up Transactions Separate transactions for withdrawals, retirement and death must be created for the Pension Funds, Provident Funds and Gratuities. Separate SITE and PAYE transactions must also be created for the Pension Funds, Provident Funds and Gratuities and these must be done for each of the payment types. For example: Withdrawal Pension Fund Withdrawal Provident Fund SITE Withdrawal Pension Fund PAYE Withdrawal pension Fund SITE Withdrawal Provident Fund PAYE Withdrawal Provident Fund 1.2.2 Linking Transactions to IRP 5 codes

Pension Fund Withdrawal/Retrenchment/Resignation Transaction

Similar for the Provident Fund. The IRP5 Income code will change to 3904 Provident Lump Sum (Resignation)

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IRP 5 set-up and Annual Extractions
Pension Fund Retirement Lump Sum Transaction

Similar for the Provident Fund. The IRP5 Income code will change to 3905 Provident Fund Lump Sums (Retirement)

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IRP 5 set-up and Annual Extractions

Pension Fund SITE Transaction on Withdrawal

Similar for the Provident Fund. The IRP5 Income code will change to 3904 Provident Lump Sum (Resignation)
Pension Fund SITE Transaction on Withdrawal

Similar for the Provident Fund. The IRP5 Income code will change to 3905 Provident Fund Lump Sums (Retirement) All payment and tax transactions must be linked in the same way as these examples.

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IRP 5 set-up and Annual Extractions
Pensioner Transaction

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IRP 5 set-up and Annual Extractions
1.2.3 Benefit Payment Details must reflect the split

1.2.4

Options (Tools/Options/Defaults)

The IRP5 default pay periods per year must be set to 1 for all lump sum payments. It is not necessary to update this field if pensions are run on the same database as non pensioner members. 1.2.5 Adding Tax Suppliers for a Fund (refer to note on Version 3.22 Release Document) NOTE: • • • • • The Supplier Number = the PAYE number for the tax supplier – 10 digit number begins with 7. The Name = name of Tax Supplier (Registered with SARS) The Tax Number = the PAYE number for the tax supplier – 10 digit number begins with 7. Address = registered address of the tax supplier. Last IRP5 Number = 0. When setting up the Tax Supplier for the “Last IRP5 Number” MUST always be 0.

Link the fund to the Tax Supplier. If there is no separate Tax Supplier per fund then system level Tax Supplier can be used.

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IRP 5 set-up and Annual Extractions 2. CREATING IRP5’s
IRP5’s can be created in two ways. 1.1.1 Running the IRP5 wizard After the member has exited via the dropdown menu Wizards\Date Extraction\Tax & Legislation\IRP5 Extraction Wizard or using the icon The wizard can be run for any owner (member, fund, employer, category product) for a particular tax year and for a certain account type.

If the wizard is run this way, the transaction history records will be interrogated and all transaction history records with a due date that falls in the tax year selected in the wizard will be used to create the IRP5. The Date Ceased Membership is used for Date From and Date To in the case of lump sums.

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IRP 5 set-up and Annual Extractions

1.1.2

Creating IRP5’s in the second phase of the payment wizard

When an IRP5 is created in the second phase of the benefit payment the payment date is used to determine the tax year of the IRP5

For example:

Using the above dates: o o o A Benefit Payment History record will be generated by the above with a payment date = 05/07/2005, An exit date = 01/05/2004. The Transaction History records will have an effective date = 06/07/2005(same as Date Paid), a due date = 01/05/2005 (the same as Date Due) and a ledger date = 05/09/2005(same as Ledger Date)

•

The tax year gets generated by the Payment date in this case 05/07/2005 the tax year will be 2006.

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IRP 5 set-up and Annual Extractions
• The transactions (for IRP5 purposes) where the due date falls in the tax year get selected to write IRP5 records. In this case all IRP5 related transactions where due date is greater than 01/03/2005 and smaller than 28/02/2006 In this case the IRP5 record will have a tax year of 2006 and the date ceased membership, date employed from and date employed to will be 01/05/2004 (in the case of lump sums).

•

IMPORTANT NOTES TO REMEMBER
Prior to exiting the members ensure that the following details are complete or the IRP5 report will be incorrect:

• • • • • • •

Fund Information (entity registered with SARS). Registered address of the fund (postal address) The PAYE number of the fund must a specific value called “Fund PAYE Number”. This number is NOT the same as the Tax Number that you on the fund details. Member Information The members ID number or Passport number. This field determines the “Nature of the person” – refer to the SARS Tax Manual = EMP10. The members Income Tax Number. The members address.

3. ANNUAL IRP5 RECONCILIASIONS
• • • The SARS Supplier Table must be completed. The User Details for the person that runs the extract must be completed (including Report Name, Fax No, Phone No, Street Address, and Postal Address). The following specific values must also be added (both these fields are text fields) : Administrator Administrator PAYE Number • The annual IRP5 reconciliation process is only run after the IRP5 records for the members have been created.

The Extraction can be run via the dropdown menu Wizards\Date Extraction\Tax & Legislation\IRP5 Extraction Wizard or using the icon

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IRP 5 set-up and Annual Extractions

We advice that a test file gets send to SARS to ensure all the data is correct. All IRP5’s for the selected tax year will be extracted.

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IRP 5 set-up and Annual Extractions
Please Note: o o All the information as specified in the IRP5 Requirements Document must be completed prior to running this extract. Use the TEST option to verify correctness of the extract info.

1 Details of the extract
(Most of the details are derived from the IRP5 records that have been created for the members). The Type (M) is mandatory.
Section AHeader AHeader AHeader AHeader AHeader AHeader AHeader AHeader AHeader AHeader AHeader AHeader AHeader AHeader BHeader BHeader BHeader BHeader BHeader BHeader BHeader BHeader BHeader BHeader CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails Length 70 10 30 16 16 35 35 35 35 4 8 4 4 4 70 10 4 35 35 35 35 4 1 4 8 1 120 90 90 13 13 8 16 10 35 Format A N A A A A A A A N N N A N A N N A A A A N A N A A A A A N A N A N A Type M M M M O M O O O M M M M M M M M M O O O M O M M M M M M M M M M O M Field_Name Sp Value - Administrator Sp Value - Administrator User Report Name User Details User Details User Details User Details User Details User Details Value CreatorName CreatorRefNumber ContactName ContactNumber NA ContactAddress1 ContactAddress2 ContactAddress3 ContactAddress4 ContactPostalcode CreationDate GenerationNumber TestIndicator EndofRecord EmployerName EmployerRefNumber TaxYear EmployerAdress1 EmployerAdress2 EmployerAdress3 EmployerAdress4 EmployerPotalcode DiplomaticIndemnity EndofRecord IRP5/IT3(a)Number NatureofPerson EmployeeSurname FirstTwoNames Initials IDNumber PassportNumber DateofBirth CompanyNumber IncomeTaxRefNumber EmployeeAddress1

Employer_Name Reference_Number Tax_Year Employer_Address_1 Employer_Address_2 Employer_Address_3 Employer_Address_4 Employer_Postcode Diplomatic Indemnity Number Nature_of_person Surname Other_Names Initials ID_Number Passport_Number DateofBirth Company_Number Income_Tax_Number Employee_Address_1

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IRP 5 set-up and Annual Extractions
CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails CDetails DTrailer DTrailer DTrailer DTrailer ETrailer ETrailer 35 35 35 20 25 8 8 1 3 3 1 13 15 15 15 15 15 15 15 15 15 15 15 15 15 12 12 12 2 4 15 15 12 4 15 4 A A A A A N N A N N A A N N N N N N N N N N N N N N N N N N N N N N N N O O O M M M M O M M O O O O O M M M M M M M M M M M M M M M M M M M M M Employee_Address_2 Employee_Address_3 Employee_Address_4 Employee_Postcode Employee_Number PeriodEmployedFrom PeriodEmployedTo Voluntary_Over_Deduction PayPeriodsinTaxYear PayPeriodsWorked Fixed_Rate_Income Directive_Number EmployeeAddress2 EmployeeAddress3 EmployeeAddress4 EmployeePostcode EmployeeNumber PeriodEmployedFrom PeriodEmployedTo VoluntaryOverDeduction PayPeriodsinTaxYear PayPeriodsWorked FixedRateIncome DirectiveNumber NA NA NA IncomeSourcesLumpSums NA NA RetirementFundingIncome NonRetirementFundingIncome GrossRemuneration PensionFundContributions ProvidentFundContributions MedicalAidContributions RetirementAnnuityFundContributions SITEDeductions PAYEDeductions TotalDeductions ReasonCodeforIT3a EndofRecord EmpTotalNumberRecords EmpTotalCodeValue EmpTotalAmount EndofRecord CreatorTotalNumberRecords EndofRecord

IncomeSourcesLumpSums

RetirementFundingIncome NonRetirementFundingIncome GrossRemuneration PensionFundContributions ProvidentFundContributions MedicalAidContributions RetirementAnnuityFundContributions SITEDeductions PAYEDeductions TotalDeductions ReasonCodeforIT3a Total Total Total Total

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Description: What is Business Process Management (BPM)