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OHAUA_INDEXATION_003 - Enter Threshold for Calculating Indexation

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In this Customizing activity, you specify the legally defined percentage that the system uses to determine when the cumulated consumer price index (CPI) leads to an increase in the indexation percentage.

In line with legal requirements, the system cumulates the CPI each month until the cumulated CPI exceeds the threshold for indexation. The system uses the cumulated CPI to determine the indexation percentage that it uses to calculate the indexation amount that an employee receives each month.

Asume that the legally defined threshold for indexation is 101%.

When the cumulated CPI exceeds 101%, the system determines the indexation percentage by subtracting 100% from the cumulated CPI. The table below shows the CPIs and the cumulated CPI from March through May:

Month	CPI in Month (%)	Cumulated CPI (%)
March	100.6	100.6
April	100.3	100.9
May	100.4	101.3

As the table above shows, the cumulated CPI exceeds 101% in May.

The system determines the indexation percentage that applies starting in May by subtracting 100% from the cumulated CPI. In the above example, the indexation percentage that applies from May is 1.3% (101.3% - 100%).

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