Retirement Fund ED Code Structure {FPRG-12}

Retirement Fund Tax harmonisation was introduced with effect from 01-Mar-2016 and is applicable to South African clients only.

This option (which is applicable to South African clients only) is used to link the Earning and Deductions Codes, per Retirement Fund Code, used for the calculation of the salary transactions that are applicable to the Retirement Funding Tax Harmonisation Legislation calculation. Only Funds that have been defined as a Pension Fund (Fund Type “P”), Provident Fund (Fund Type ‘V’) or Retirement Annuity Fund (Fund Type “R”) {FPRG-3} may be maintained on this option.

Fields in this option:

Panel Box 1: Retirement Funding Earning / Deduction Codes.

Field	Type & Length	Description
Fund Code	A4	The Fund Code for the Pension Fund (Fund Type “P”), Provident Fund (Fund Type “V”) or Retirement Annuity Fund (Fund Type “R”) as defined on {FPRG-3}.
Cycle Year	(YYYY)	The Year in which this setup becomes effective.
Month	N2	The Month in which this setup becomes effective.
Employee Contribution ED Code	A4	The Deduction Code for the Employee’s current months’ contribution to the Pension, Provident or Retirement Annuity Fund. This ED Code should be linked to the Appointment Types of the relevant personnel members in the Global Earning / Deduction Detail {FPRG-7}. The Calculation Method should be “A” Pension. It should be a pre-tax deduction linked to one of the following Tax Codes depending on the type of Fund: Pension Fund – Tax Code 4001 Provident Fund – Tax Code 4003 Retirement Annuity Fund – Tax Code 4006
Employee Arrear Contribution ED Code	A4	The Deduction Code for the Employee’s arrear contribution to the Pension, Provident or Retirement Annuity Fund. This ED Code should either be linked to the Appointment Type of the relevant personnel members in the Global Earning /Deduction Detail {FPRG-7} or Individual Transactions on {FPRI-2}. The Calculation Method would usually be “A” Pension or “3” Advised Amount. It should be a pre-tax deduction linked to one of the following Tax Codes depending on the type of Fund: Pension Fund – Tax Code 4001 Provident Fund – Tax Code 4003 Retirement Annuity Fund – Tax Code 4006
Employee Contribution > Allowed Amount ED Code	A4	The Earning Code used to calculate the Employee’s total contribution to Retirement Funding that is greater than the capped percentage of the Employee’s total remuneration, or greater than the capped total contribution amount allowed as a pre-tax deduction, as defined by legislation. To view the allowed capped percentage and allowed capped total contribution amount, see Table 9998 on {FPRG-5}. The Employee’s contribution used in the calculation, consists of the current month’s contribution, plus Employee’s arrear contribution, plus Employee’s buy back contribution, plus Employee’s voluntary additional contribution, plus Employee’s Deemed Benefit amount (which equals the Fringe Benefit on Employer’s Contribution Amount) plus any additional Retirement Annuity policies (Tax Code 4006) included in the salary calculation of the employee, for tax benefit purposes. This code should be linked to the Appointment Types of the relevant personnel members in the Global Earning / Deduction Detail {FPRG-7}. The Calculation Method should be “X” Retirement Funding. It should be a pre-tax Earning, linked to Tax Code 9998. When used in a Full Salary Calculation {FPRN-2} or Single Salary Calculation {FPRN-3}, the Tax Code will programmatically be changed to the correct Tax Code, determined by the Fund Type: Pension Fund – Tax Code 4001 Provident Fund – Tax Code 4003 Retirement Annuity Fund – Tax Code 4006 The purpose of this calculation is to ensure that the employee doesn’t benefit from a pre-tax Retirement Funding deduction that exceeds the maximum percentage of remuneration allowed or the maximum total amount allowed, as determined by legislation. Cumulative calculation is done on total remuneration to ensure that the maximum pre-tax benefit allowed, is given to the Employee.
Employee Contribution > Allowed Amount Contra ED Code	A4	The Deduction Code which is a contra to the Employee Contribution > Allowed Amount Earning Code. This code should be linked to the Appointment Types of the relevant personnel members in the Global Earning / Deduction Detail {FPRG-7}. The Calculation Method should be “6” Percentage of Transaction. It should be an after-tax Deduction, linked to Tax Code 9998. When used in a Full Salary Calculation {FPRN-2} or Single Salary Calculation {FPRN-3} the Tax Code of the salary transaction will programmatically be changed to the applicable Tax Code as determined for the Employee Contribution > Allowed Amount ED Code.
Employer Contribution ED Code	A4	The Earning Code for the Employer’s Contribution to the Retirement Fund (Pension, Provident or Retirement Annuity). This code should be linked to the Appointment Types of the relevant personnel members in the Global Earning / Deduction Detail {FPRG-7}. The calculation method would usually be “A” Pension. It should be an after-tax Earning, linked to Tax Code 9999.
Employer Contribution Contra ED Code	A4	The Deduction Code which is a contra to the Employer Contribution Earning Code. This code should be linked to the Appointment Types of the relevant personnel members in the Global Earning / Deduction Detail {FPRG-7}. The calculation method would usually be “A” Pension or “6” Percentage of Transaction. It should be an after-tax Deduction and depending on the type of Retirement Fund it should be linked to one of the following Tax Codes: Pension Fund, Tax Code 4472 Provident Fund, Tax Code 4473 Retirement Annuity, Tax Code 4475
Fringe Benefit on Employer Contribution ED Code	A4	The Earning Code for the Fringe Benefit on the Employer’s contribution made to the Retirement Fund for the employee’s benefit. This code should be linked to the Appointment Types of the relevant personnel members in the Global Earning / Deduction Detail {FPRG-7}. The calculation method should be “X” Retirement Funding. It should be a pre-tax Earning, linked to Tax Code 9998. When used in a Full Salary Calculation {FPRN-2} or Single Salary Calculation {FPRN-3}, the Tax Code of the salary transaction will programmatically be changed to the applicable Tax Code, determined by the Retirement Fund Type (Pension, Provident or Retirement Annuity) {FPRG-3} and the Fund Component (DC Defined Contribution, DB Defined Benefit or DC&DB a combination of Defined Contribution and Defined Benefit) as defined for the Employee /Retirement Fund Type {FPRI-15} or {PAOP-10} Pension Fund, DC Component, Tax Code 3817 Pension Fund, DB Component, Tax Code 3818 Pension Fund, DC&DB Component, Tax Code 3819 Provident Fund, DC Component, Tax Code 3825 Provident Fund, DB Component, Tax Code 3826 Provident Fund, DC&DB Component, Tax Code 3827 Retirement Annuity Fund, Tax Code 3828 If the Fund Component is DC (Defined Contribution) then the Fringe Benefit Amount equals the Employer’s Contribution to the Fund. If the Fund Component is either DB (Defined Benefit) or DC&DB (a combination of Defined Contribution and Defined Benefit) then a legislated formula is used to calculate the Fringe Benefit amount as detailed below: FB = (Fund Factor X Retirement Funding Income) minus Employee’s contribution to the fund (current, arrear and buyback. Voluntary Additional Contributions are excluded).
Employee Deemed Benefit ED Code	A4	A Deduction Code with which to calculate the Employee Deemed Benefit Amount. As the employee is paying a Fringe Benefit on the Employer’s Contribution, the Fringe Benefit Amount is deemed to be an Employee contribution. Therefore, this ED Code is a contra to the Fringe Benefit Amount on the Employer’s Contribution Earning Code. This code should be linked to the Appointment Types of the relevant personnel members in the Global Earning / Deduction Detail {FPRG-7}. The calculation method should be “6” Percentage of Transaction It should be a before-tax Deduction, linked to Tax Code 9998. When used in a Full Salary Calculation {FPRN-2} or Single Salary Calculation {FPRN-3}, the Tax Code of the salary transaction will programmatically be changed to the applicable Tax Code, determined by the Retirement Fund Type (Pension, Provident or Retirement Annuity) {FPRG-3} Pension Fund, Tax Code 4001 Provident Fund, Tax Code 4003 Retirement Annuity Fund, Tax Code 4006.
Employer Arrear Contribution ED Code	A4	The Earning Code with which to calculate the Employer’s Arrear Contribution. This code should be linked to the Appointment Types of the relevant personnel members in the Global Earning / Deduction Detail {FPRG-7} or Individual Transactions on {FPRI-2}. The calculation method should be “A” Percentage of Transaction or “3” Advised Amount. It should be an after-tax Deduction, linked to Tax Code 9999.
Employer Arrear Contribution Contra ED Code	A4	The Deduction Code which is a contra to the Employer Arrear Contribution Earning Code. This code should be linked to the Appointment Types of the relevant personnel members in the Global Earning / Deduction Detail {FPRG-7}. The calculation method would usually be “A” Pension or “6” Percentage of Transaction. It should be an after-tax Deduction and depending on the type of Retirement Fund it should be linked to one of the following Tax Codes: Pension Fund, Tax Code 4472 Provident Fund, Tax Code 4473 Retirement Annuity, Tax Code 4475
Employee Buy Back ED Code	A4	The Deduction Code for the Employee’s Buy Back contribution to the Pension, Provident or Retirement Annuity Fund. This ED Code would usually be linked to Individual Transactions on {FPRI-2}. It should be linked to the Appointment Types of the relevant personnel members in the Global Earning / Deduction Detail {FPRG-7}. The Calculation Method would usually be “3” Advised Amount. It should be a pre-tax deduction linked to one of the following Tax Codes depending on the type of Fund. Pension Fund – Tax Code 4001 Provident Fund – Tax Code 4003 Retirement Annuity Fund – Tax Code 4006

Example:

Processing Rules
	No special processing rules.

Date	System Version	By Whom	Job	Description
17-Dec-2015	v03.0.0.0	Sakhile Ntimane	t209237	New Manual Format
30-Jan-2017	v04.0.0.0	Sakhile Ntimane	t219225	Change image to Integrator4.
09-Oct-2017	v05.0.0.0	Sthembile Mdluli	t220571	convert image to the intergrator 5 system version.
13-Nov-2018	v04.1.0.0	Sthembile Mdluli	t232368	Convert to ADF