Business Software Incorporated (BSI) is a third-party company that interfaces with SAP systems to provide the tax results for US payroll via its BSI TaxFactory product. When you run US payroll within an SAP system, a standard interface sends data via a remote function call (RFC) so that the taxes can be calculated and returned for processing within the SAP Payroll Driver. All companies that run SAP Payroll in the US must have the BSI interface because US taxes cannot be calculated within an SAP system.

BSI releases tax updates per IRS regulations via Regulatory Bulletins. These Regulatory Bulletins contain tax changes that need to be updated in the BSI client, and also within the SAP system. SAP has traditionally released Tax Update Bulletins (commonly known as TUBs) after BSI releases its Regulatory Bulletins.

BSI 10.0 Update

The latest version of BSI is 10.0, which was released in July 2013. SAP originally announced that the previous version (BSI 9.0) would be decommissioned on November 30, 2014, and that all companies must be on the new version by then. In response to complaints, and due to issues with upgrading to the new version, SAP announced an extension of this date to March 31, 2015, in the ASUG 2014 Payroll Year-End presentation and has stated that “There are no options for extending BSI TaxFactory 9.0 support after March 31, 2015.” (For more information about the BSI TaxFactory 10.0 roadmap, see SAP Note 1875218 which is updated as SAP announces any relevant changes; log-in is required.)

To see a good presentation from SAP about the biggest changes from the old process of applying TUBs to the new processing, click the following link: HCM US Payroll - TUB Workbench, a new tool replacing SMP TUB updates. This link provides some useful information on how to use this new BSI tool.

The key difference between the old process and new process is that you no longer have to wait for SAP to release its updates after BSI releases its related Regulatory Bulletin, and you have a new tool to synchronize the data. Previously, with BSI 9.0, BSI would release a Regulatory Bulletin and then you would have to wait for SAP to release the corresponding TUB, which you would then download and apply in your SAP system. In my experience, companies would end up waiting for SAP to release the TUBs so that they could apply them even though BSI had already released the bulletin a week or two earlier. The new process not only improves the overall processing time of releasing tax updates, it also reduces the overall time that it takes to apply the updates and ensures that the data is synchronized between SAP and BSI.

The transaction code for the new tool is HRPAYUS_SYNC_TAX_DT. It is delivered only with an SAP Support Package as it cannot be imported via SAP Notes directly. SAP released TUB updates (for BSI 9.0) until April 2015, but the new tool (BSI 10.0) is required after this date.

The other significant change announced by SAP for BSI 10.0 is the process for resolving standard issues with either SAP or BSI. The old process required reaching out to BSI separately via email or phone in order to get support from them, and opening an SAP Note for any issues on the SAP side. Effective May 2013 there is a new option to create messages for BSI via the SAP Note message process. You can use the message in component area XX-PART-BSI-TFY; this area is maintained by BSI. Companies still have the flexibility to reach out directly to their BSI contact via email or phone.

How to View the BSI Level in the Payroll Schema and Test the BSI Connection in SAP

One of the first questions I’m asked by companies new to BSI is “How do I know which version of BSI and which TUB level I am on?” You can check this directly in the payroll schema by following these steps.

Execute transaction code PUOC_10 for the US Off-Cycle Workbench. In the screen that opens (Figure 1), enter the Personnel No. to process, select the Payroll tab, select the Regular period ‘on demand’ Reason, and click the Start Payroll button. This should run the payroll and you should now see the Payroll Result and an eyeglass icon (boxed in red in the figure). Click the icon to display the payroll log.

Figure 1

The Off-Cycle Workbench screen

Once you click the log button, you need to navigate to function UPAR1, which should have a comment to view the BSI version flag as seen in Figure 2. Double-click this variable (highlighted in the figure) and it displays the TaxFactory version and update level. You can see in Figure 3 that this shows TaxFactory 10.0.b and Update level 20 (the TUB level).

Figure 2

The SAP Payroll schema log

Figure 3

Double-click function UPAR1 to view the BSI and TUB versions

Update the Configuration Required for BSI 10.0

Now that you know how to identify which version of BSI TaxFactory that you are on, if you check and you’re on BSI 9.0 and need to update to 10.0, then there are a few pieces of configuration that need to be updated.

Navigate to the following locations in the IMG by following menu path Payroll > Payroll: USA > Tax > SAP/BSI Interface > Specify BSI TaxFactory version for customizing settings and Specify BSI TaxFactory version for master data and tax calculation (Figure 4).

Figure 4

The IMG locations of the BSI TaxFactory updates

Once here (Figure 4), you need to update the IMG activity Specify BSI TaxFactory version for customizing settings to use version 10.0. In the screen in the figure, double-click the Specify BSI TaxFactory version for customizing settings option and the screen in Figure 5 opens. Here you change the value in the table from V90 to V10 as shown, and save the new settings.

Figure 5

Before and after updating BSI

For the IMG activity Specify BSI TaxFactory version for master data and tax calculation you need to update this to use version 10.0. Change the value in the table from 90 to 10 as seen in Figure 6. Once you’ve made these changes, click the activate icon .

Figure 6

Before and after the second update to BSI

Now that you have updated these two variables, you can begin testing the new version of BSI 10.0 to ensure that payroll is running correctly per these new settings.

BSI and SAP Configuration Integration Points

Up until this point, I have given an overview of SAP Payroll and BSI and explained some of the new features in BSI 10.0. However, I have not touched on the setup for linking BSI and SAP Payroll together. From an SAP perspective, the link between the SAP system and BSI is at the tax company level which is a legal entity for tax reporting purposes. Each tax company has tax authorities (for example, Federal [FED] or state [e.g., GA]) underneath it that are assigned an employer ID number which is assigned by the respective tax authority.

The setup for this is done at the following location of the IMG Payroll: > Payroll: USA > Tax > Tax Companies as shown in Figure 7.

Figure 7

The IMG location for the BSI tax companies

First, select the Define BSI Tax Company activity in the IMG location listed in the figure. Then enter the tax company in this configuration table that has specific experience rates for different tax types (Figure 8).

Figure 8

Define the BSI tax company

Next, select the activity Define tax identification numbers by BSI Tax Company and assign each employer ID number to the BSI tax company you created in the previous step (Figure 9). The employer ID number should be sent to you by the appropriate tax authority and is specific to every corporation.

Figure 9

Define the employee tax ID numbers by BSI tax company

Lastly, select the activity Define federal/state/local employer ID number (back in the screen in Figure 7) and assign the appropriate tax authority and tax type the correct employer ID number for the respective tax company (Figure 10).

Figure 10

Define the Federal, state, local tax authorities, and the employer ID number

Now that you have completed the necessary configuration within the SAP system, you need to do the appropriate configuration within BSI TaxFactory. For the new version of BSI 10.0, go to the appropriate BSI TaxFactory 10.0 website portal (you should have this information since the link is particular to your company) and log-in using your information. A screenprint of this log-in screen is shown in Figure 11.

Figure 11

Log-in for BSI TaxFactory 10.0

Once you are logged in, on the right side of the screen you should see the Jump To box with drop-down options (Figure 12). Select Manage Companies.

Figure 12

The BSI 10.0 Jump To screen

This opens the screen shown in Figure 13 where you now need to create the same tax companies in BSI that you created earlier in Figure 8. Enter the new tax company code and the appropriate details; the tax company code should match the one created in Figure 8 earlier.

Figure 13

Create and manage the new tax companies

Enter the Company Code, FEIN (Federal employer ID number), and Company Name and click the Save button to save your changes. With that last click you have created the link between the SAP system and BSI for this tax company. Repeat these steps as needed for any additional tax companies.

Update Unemployment Overrides

Once you are live with SAP Payroll and have the BSI interface set up, one of the most common updates that you will make is to update the unemployment overrides. This is because these change on an annual basis and, since they are company-specific, they are not delivered by SAP (although there are standard rates that SAP does deliver if you do not have an override).

First, you need to log on to BSI (Figure 11), and then navigate to the Manage Unemployment Overrides section using the Jump To options. This brings you to the screen shown in Figure 14 where you can select the company code to create a necessary override.

Figure 14

BSI unemployment overrides

Click one of the existing tax companies created earlier and any existing overrides for that tax company are brought up, and you have the option to create a new override (Figure 15).

Figure 15

The list of BSI tax company UI overrides

To create a new override, you may either edit an existing override or create a new one. You need to provide the following fields for the new override:

• Start Date – The beginning date for this override.
• Authority – The tax authority to which this override applies.
• Tax Type – The tax type to which this override pertains.
• Formula – The formula to be used for calculation of the override.
• End Date – The ending date for this override.
• Account – Your account number.
• Experience Rate – The rate that should be used for this override.
• Override Max Wage – The maximum amount for this tax type.
• BSI Wage – You don’t enter anything here—this field is maintained by BSI.

Figure 16 shows the screen with all of the fields and their entries.

Figure 16

The BSI tax company unemployment override entry

Click the Save button to save your changes, and these rates and maximum values should be pulled in when running Payroll. However, you also need to make these corresponding changes within the SAP system in table V_BTXRATE. Follow menu path Payroll > Payroll: USA > Tax > Tax Data Maintenance > Unemployment Insurance > Define BSI tax company experience rates. This opens the screen in Figure 17 where you can see the appropriate entries.

Figure 17

The entry for the SAP tax company UI override

In the figure, you see that when you update this table there is a message that says Data maintained here should also be maintained on BSI via TaxFactory GUI. The reason for these dual entries is that the data for the BSI TaxFactory tables is not stored anywhere in the SAP system, but it is needed in the SAP system. The BSI entry is used during the payroll run when the BSI interface is called via an RFC, and this rate is also needed for the tax reporter transaction which does not have a connection with BSI to check the rate. As a result, the tax reporter uses the entry that is maintained directly in SAP.

Additional Information and Links

In the course of my research for this topic, I came across some other terrific resources and information in regards to BSI 10.0 and wanted to include them here for more information. I think you will find the following links helpful (log-in is required for some of these links):

1. TUB Workbench information:

• https://websmp202.sap-ag.de/~sapidb/011000358700000243532014E

• https://wiki.scn.sap.com/wiki/display/IFbAjp/BSI+TaxFactory+10.0
• https://scn.sap.com/thread/3516971
• https://wiki.scn.sap.com/wiki/display/ERPHCM/BSI

• SAP Note 1905340 (Installing TaxFactory 10.0)
• SAP Note 1910127 (FAQ TaxFactory 10.0 Install/Upgrade Troubleshooting)
• SAP Note 1903607 (Phase 1 delivery)
• SAP Note 1909014 (Phase 2 delivery)
• SAP Note 1934840 (Phase 3 delivery)
• SAP Note 1937142 (Nonresident Worked Days parameters)
• SAP Note 1875218 (BSI Upgrade Roadmap)

Imran Sajid

Imran Sajid is a Senior Education Consultant at SAP based in the Atlanta, GA, area. At SAP, he focuses on teaching classes in the HCM area within both SAP and SuccessFactors. Previously, Imran was a consultant who implemented and provided post-go-live support for more than a dozen different client systems spanning many industries, including manufacturing, automotive, retail, information systems, the public sector, and energy. He is the author of the book entitled, The Payroll Control Center for SAP ERP HCM and SAP SuccessFactors, as well as a frequent contributor to SAP Experts, where he has published almost a dozen articles. Imran is also frequent blogger on SAP Community Network (SCN). He graduated from the Georgia State University Robinson College of Business with a degree in Computer Information Systems. Imran can be found on Twitter @ImranSajidSAP.

You may contact the author at Imran.Sajid@sap.com.

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