| Calculation
Method |
Calculation
Rules and Example |
| 1
- Pct. of Salary Level Total |
The
“Salary Level Total” is the cumulative total at the
reference level.
Typical examples would be:
- The specification of an E/D as a percentage of basic
salary (level “0”,
i.e. notch), irrespective of: marital status, gender, number of
dependents, etc. An example would be a pensionable or
non-pensionable
allowance.
- The specification of PAYE as a fixed percentage of
earnings (i.e. not
according to the tax tables). An example would be
compensation on a
claim basis, where 25% tax must be deducted for persons above a certain
annual income level.
An example of a Global transaction would be:
| Appt Type |
21
Full-Time Perm Admin |
| E/D
Code |
0100 Pensionable
Allowance (E) |
| Sal.
Level |
1 |
| IRP5
Box |
3601 Income - Taxable |
| Calc. Meth. |
1
Pct. of Salary Level Total |
| 3.
Ref Sal
Lev |
0 |
| 6.
Calc.
% |
10 |
This
means that all employees in Appointment Type {FPRG-10}
will receive 10% of
notch as a pensionable allowance at salary level
“1”. The implication
is, of course, that pension must be calculated at a level higher than
“1”. |
| 2
- Annual Bonus |
The
system allows a
person to earn an annual
service bonus
based on his/her number of completed service months or service days on
the last day of a particular month. A bonus will, thus, be paid
automatically if the person is in service on the last day of the
following month (the so-called “bonus month”
- See "Default Bonus Months {FPRM-5}.)
The
calculation of the service bonus amount may be
specified at
global level per Appointment Type {FPRG-10}
as a percentage (usually 100 percent)
of a salary level total (usually level “0”, i.e.
the employee's
notch).
Note that if this calculation method is specified in the Individual
Earnings/Deductions {FPRI-2},
the "bonus month" will be ignored and the bonus will be
calculated
for all cycles between the Start and End Date of the Earning.
The default bonus calculation is based on service months
(in which case partial months are counted as full
months): alternatively,
the calculation can be based on service days,
rather than service
months, with a maximum bonus period of 365 days. This is done
by
entering the word “DAYS” into the first four
positions of the Reference
Number.
An Indicator ‘Exclude for Bonus Calculation?’
exists on the Service Record {PBOP-2}
of Personnel Members. This may be used in cases where a
Personnel
Member has a continuous service period (within the Bonus calculation
period), with more than one Service Record where the conditions of
employment differ between one Service Record period to another i.e.
Part Time employment (no Bonus payable) and Full Time employment (Bonus
payable). The salary calculation program uses this Indicator
when
determining the bonus period for the calculation of the
Bonus.
See examples below:
Example 1:
Bonus Month: 12,
Cycle 201612
Service Record
Start
Date
01-Jan-2016 End
Date
Null
Exclude for Bonus Calculation? ‘N’ or null
Start Date
01-Jan-2015 End Date
31-Dec-2015
Exclude for Bonus Calculation?
‘N’ or null
Bonus period is calculated for a maximum of 12
continuous
cycles prior to the cycle in which the bonus is being paid (current
functionality).
Bonus Period =
201601 to
201611
Exclude for Bonus Indicator = ‘N’ or null
201512 to
201512
Exclude for Bonus Indicator = ‘N’ or null
Therefore Bonus Calculation period = 201512 to 201611 – full
bonus will be paid
Example 2:
Bonus Month: 12,
Cycle 201612
Service Record
Start
Date
01-Jan-2016 End
Date
Null
Exclude for Bonus Calculation? ‘N’ or null
Start Date
01-Jan-2015 End Date
31-Dec-2015
Exclude for Bonus Calculation?
‘Y’
Bonus Period =
201601 to
201611
Exclude for Bonus Indicator = ‘N’ or null
201512 to
201512
Exclude for Bonus Indicator = ‘Y’
Therefore Bonus Calculation period = 201601 to 201611 –
pro-rata bonus will be paid only if Pro-rata Indicator on {FPRM-5} is set to
‘Y’
Example 3:
Bonus Month: 12,
Cycle 201612
Service Record
Start
Date
01-Jul-2016 End
Date
Null
Exclude for Bonus Calculation? ‘N’ or null
Start Date
01-May-2016 End Date
30-Jun-2016
Exclude for Bonus Calculation? ‘Y’
Start Date
01-May-2015 End Date
30-Apr-2016
Exclude for Bonus Calculation? ‘N’ or null
Bonus Period =
201607 to
201611
Exclude for Bonus Indicator = ‘N’ or null
201605 to
201606
Exclude for Bonus Indicator = ‘Y’
No previous service periods are taken in account as indicator on above
service record is set to ‘Y’
Therefore Bonus Calculation period = 201607 to 201611 –
pro-rata bonus will be paid, if Pro-rata Indicator on {FPRM-5} is set to
‘Y’ (FSWPRORATE)
Example 4:
Bonus Month: 12,
Cycle 201612
Service Record
Start Date
01-Feb-2016 End Date
Null (NB: non continuous Service P)
Excl for Bonus
Calculation? ‘N’
Start
Date
01-Jan-2015 End
Date
31-Dec-2015
Excl for Bonus Calculation? ‘N’
Bonus Period =
201602 to
201611
Exclude for Bonus Indicator = ‘N’ or null
Previous Service Record not taken into account as service period is not
continuous
Therefore Bonus Calculation period = 201602 to 201611 –
pro-rata bonus will be paid, if Pro-rata Indicator on {FPRM-5} is set to
‘Y’
The system will automatically prorate a bonus during the first year
of service if, and only if, the calculation percentage is equal
to 100
percent.
If the latter option (days) has been chosen:
- Unpaid
leave days taken during the bonus period can be automatically taken
from the Personnel Leave Subsystem for one type of unpaid leave, by
entering the three-character code for the Unpaid Leave Type into the
last three positions of the Reference Number on the global
transaction. Note that the system will recognise only
complete
leave periods
which fall completely within the bonus period.
- Alternatively,
the number of unpaid leave days during the bonus period can be
specified at individual level as the low limit amount in the bonus E/D
detail: the system will then calculate the deduction for
unpaid leave
based on a 365 day year. Note that a non-zero entry in this
field will
always overrides a specification that is per the previous paragraph.
An automatic bonus will not be paid during a person's
appointment
month, as the system bases the calculation on completed service months
or days.
Taxation in the case of a service bonus:
- The Payroll System calculates tax at marginal rates
in the
case of bonus earnings. An indicator, which determines
whether
tax
on bonus should be deducted in total when the bonus is received or in
equal monthly amounts during the relevant tax year, is set according to
the choice of the individual in the "Fixed Salary Detail" {FPRI-1}
- Please
note: that if a separation bonus is paid in a person's month of
resignation or retirement, and an annual bonus has already been paid
earlier in the tax year via calculation method “2”,
this
separation bonus and any stab fund contribution must be advised via
calculation method “3”. (If calculation
method
“2” is
used for a second time in the month of separation, the cumulative tax
calculation (and SITE calculation) will be incorrect).
- Furthermore,
if a person pays monthly tax on bonus, the user must be particularly
careful not to use calculation method “2” twice per
year.
Any further bonus earned will, therefore, be taxed in the month of the
bonus.
Dealing with exceptions:
- If the rules for the automatic calculation should not
apply
to a particular person, the globally-specified bonus can be overridden
at individual level in any month (not only a person's bonus month).
- This allows the advising of an early bonus upon
retirement or death of an employee.
- It can also be useful when no bonus at all is to be
paid
or when a reduced bonus is to be paid for reasons other than unpaid
leave.
- Such advices can be given either by a different
percentage or by specifying an advised amount.
- An advised amount will always override any percentage
that may be specified.
- An advised bonus will also always override the
standard pro-rating.
- This can be useful when a partially-earned bonus is
carried forward from a previous employer, and the employee must receive
the full bonus (Note that an amount must be advised in this case, since
a percentage of 100 will result in standard pro-rating!)
- Particular
care should be taken when a bonus is advised for a person who pays
monthly tax on bonus, since the system must do the bonus calculation
every month in order to calculate the monthly tax deduction.
In
such cases, the bonus transaction must be specified
with start
and end dates in the payroll cycle of the bonus payment, but
the
transactions must remain in the system until the last pay run of the
particular tax year has been completed.
An optional deduction in respect of a Stabilisation Fund can
be specified via calculation method S:
either as a percentage of the actual gross bonus paid (i.e. the bonus
reduced by the number of unpaid leave days); or as a percentage of the
maximum gross bonus, by entering the characters
“MAX” into
positions 6 -> 8 of the Reference Number).
A typical set of four Global transactions that define the bonus would
consist of:
- One transaction that defines the gross bonus
for the employee. In this example: the calculation is based on service
days, the maximum bonus is 100% of salary level “0”
(i.e. notch) and is calculated at level “11”,
and the unpaid leave with code “UPL”
is taken from the Personnel Leave Subsystem to determine the actual
bonus earned. The stabilisation fund deduction will be based
on
maximum bonus. Note that in the example only the appropriate
GL
Account is specified - the system will, therefore, default to the cost centre
of the employee's post:
| Appt Type |
21
Full-Time Perm Admin |
| E/D
Code |
0150 Annual Bonus (E) |
| Sal.
Level |
11 |
| IRP5
Box |
3601
Income Taxable |
| Calculation Method |
2 Bonus |
| GLA |
0211 Staff
Benefits (Bonus) |
| Ref.
Number |
DAYS.MAX.........UPL |
| 3.
Ref Sal
Lev |
0 |
| 6.
Calc. % |
100 |
- An (optional) transaction, which defines the stabilisation
fund deduction
of 7% is calculated at level “12”; it must use Calc
Method
'S' and it must refer to the above E/D code that was used for the gross
bonus:
| Appt Type |
21
Full-Time Perm Admin |
| E/D
Code |
5800 Payment to
Stab Fund (Bonus) (D) |
| Sal.
Level |
12 |
| IRP5
Box |
3601 Income -
Taxable |
| Calc. Meth. |
S
Stabilisation Fund Deduction |
| GLA |
F0019338
Work Fund: Stabilisation Fund |
| 4. Ref E/D Code |
0150
Annual Bonus |
| 6.
Calc. % |
7 |
| 7.
Fund Number |
P3
Pension Fund 3 |
- Two contra transactions reflecting the institution's
contribution to the stabilisation fund, calculated as a percentage of
the employee's contribution to the stabilisation fund, i.e. a
percentage of the preceding transaction, but not of the bonus
transaction:
| Appt Type |
21
Full-Time Perm Admin |
| E/D
Code |
2400 Stab Fund
(Bonus): Employer (E) |
| Sal.
Level |
60 |
| IRP5
Box |
9999 Non IRP5
Total |
| Calc. Meth. |
6
Pct. of Transaction |
| GLA |
0211
Staff Benefits
(Bonus) |
| 4. Ref E/D code |
5800
Payment to Stab Fund (Bonus) |
| 6.
Calc. % |
100 |
| Appt Type |
21
Full-Time Perm Admin |
| E/D
Code |
5800 Payment to
Stab Fund (Bonus) (D) |
| Sal.
Level |
60 |
| IRP5
Box |
9999 Non IRP5
Total |
| Calc. Meth. |
6
Pct. of Transaction |
| GLA |
F0019338
Work Fund: Stabilisation Fund |
| 4.
Ref E/D code |
5800
Payment to Stab Fund (Bonus) |
| 6.
Calc. % |
300 |
|
| 3
- Advised Amount |
Both
earnings
and deductions may be advised.
Amounts may be specified as negative numbers (i.e. with a leading minus
sign) if desired.)
The Reference Number field can be used for items such as Bond Numbers,
Policy Numbers, short messages, etc., which will then appear on
detailed E/D reports.
Advised amounts are, almost without exception, individual transactions,
e.g.
| Pers.
No. |
3
Q
Gordon
|
| E/D
Code |
8000 Private
Insurance (D) |
| Sal.
Level |
90 |
| IRP5
Box |
9999 Non IRP5 Total |
| Calc. Meth. |
3
Advised Amount |
| GLA |
F0019322
Work Fund: Pers Ins Deduction |
| Ref. Number |
GOR/33-743-77 |
| 1.
Adv/Ref. Amt |
1005.00 |
The fact that there are no start and end dates specified,
means that
this deduction will occur every month until the employee resigns or
instructs the institution to stop the deduction.
GHANA
CLIENTS
Calc Method ‘3’ may be used to
calculate Overtime payments (advised
amounts) where the PAYE on Overtime is calculated programmatically as a
separate transaction to the standard PAYE. In this case, Tax
Code 13
(Overtime Payments) must be linked, Salary Level must be > 50,
in addition
to (J)unior, (S)enior or (N)on Resident being defined in field ‘7’ when
linked
to Individual Transactions {FPRI-2}. PAYE on Overtime will be
calculated
using Calc Method ‘I’ Function CALC_OT_TAX($L0,EDXXXX)
|
| 4
- PAYE |
The
correctness
of the settings of the “Regular E/D?” indicators on
the definition of "Earning / Deduction Types" {FPRG-6} is
crucial for accurate tax calculations.
The system does not usually calculate PAYE cumulatively: rather, it
calculates
an employee's yearly tax by annualising the taxable regular earnings
for a particular pay cycle (taking due account of
“short”
appointment and resignation months) and then applying the appropriate
tables to the nearest lower whole amount. Due
account is
taken of income and/or tax rebates. The yearly tax on regular
income is then reduced to arrive at the monthly tax deduction for
regular earnings.
Once-off earnings during the pay cycle are taxed at marginal rates and
added to the previous figure, so as to arrive at the total tax
deduction for
the month.
A “cumulative”
tax calculation simply means that:
- All regular taxable earnings for the tax period are
annualised
- Tax is then calculated on annualised regular earnings
and
on (annualised regular plus non-regular) earnings. The
difference
between these amounts provides the tax on the non-regular
earnings.
- The tax on the regular earnings is then converted
back to
the actual tax period and the tax on non-regular earnings is
added
to this amount to arrive at the total tax payable for the
period.
- The total tax already withheld during the period is
then deducted from this amount, resulting in the tax which is payable
in the
month.
Due account is taken of tax on bonus in this calculation, since people
who spread out tax on bonus on a monthly basis must only pay a certain
fraction of the tax on bonus.
The system will attempt to do a cumulative tax calculation under the
following conditions:
- Automatically in an employee's resignation month.
This is
particularly important for those who pay monthly tax on bonus, since
all outstanding tax on bonus must be deducted in this month.
- Automatically in the last month of the tax year (for
everybody) - the calculation program will then act similarly to the
SITE
calculation
- At user's requests, when a calculation is done
and typically in the first
pay cycle when new tax tables are implemented. The adjustment
for the
new tables is then automatic because the program re-calculates
year-to-date tax on the basis of the new tables and adjusts the
cycle's tax deduction accordingly.
It is obvious that the cumulative calculation can be done only
for
an employee's current tax period, i.e. that portion of the tax year,
to-date, during which the person was employed.
A cumulative calculation will only be done if the tax
deductions
for the employee were done solely according to the tax tables during
the period. Any advised tax, except RSA SITE advices, will
cause
the system to do a normal monthly calculation as above, with message
being
printed to this effect. (If this was not done, the
system
will persistently override advised tax deductions). The
report
on "Advised Tax Transactions" {FPRIR1-22}
will display Advised Tax Transactions (which will
prevent a cumulative tax calculation).
For detailed example calcuations, refer to "Personal Tax
Calculation Examples"
Examples of the set-up of a Global Earning/Deduction
for a tax deduction are as follows:
Example 1:
The example below will calculate the Taxable Earnings as the cumulative
amount of all salary transactions from salary level 0 to the salary
level specified
(Level 50 is specified in this case, cumulative totals up to level 49
will thus be used as taxable earnings)
| Appt Type |
21
Full-Time Perm Admin |
| E/D
Code |
6000 PAYE
(D) |
| Sal.
Level |
50 |
| IRP5
Box |
4103 Total Employee
tax |
| Calc. Meth. |
4
PAYE |
| GLA |
F0019316
Work Fund: PAYE - Perm Staff |
| 2.
Lookup Table |
1
PAYE |
| 3.
Ref Sal
Lev |
0
|
| 6.
Calc. % |
100 |
Example 2:
The example below
will calculate
the
Taxable Earnings as above, but will only use salary transactions where
the Tax Code (IRP5 Box) is taxable, and will only use the percentage of
the amount that is taxable.
Taxable tax codes and the relevant percentages may be viewed in the
second tab of IRP5 Totals { FPRC-21}
| Appt Type |
21
Full-Time Perm Admin |
| E/D
Code |
6000 PAYE
(D) |
| Sal.
Level |
50 |
| IRP5
Box |
4103 Total Employees
tax |
| Calc. Meth. |
4
PAYE |
| GLA |
F0019316
Work Fund: PAYE - Perm Staff |
| 2.
Lookup Table |
1
PAYE |
| 3.
Ref. Sal.
Lev. |
0
|
| 4.
Calc. Tax Using Tax Boxes |
Y |
| 6. Calc. % |
100 |
|
| 5
- Medical Aid |
Although
intended for Medical Aid
Funds, this calculation method can, in principal, be used whenever an
amount
can be read from a table, that is connected to a Fund, (other than
Pension or Group Insurance), as defined in Funds Detail {FPRG-3}.
Look-up tables for the fund are defined in "Lookup Table Types" {FPRG-4} and the detail for
each lookup table is entered in "LookUp Table Detail" {FPRG-5}.
This calculation method will:
- Use the number of Medical Aid Dependants in
the Cycle for which a Salary Calculation is done.
- Use the cumulative total for a specified
Salary Level.
- Obtain a Range Amount from the
Look-Up Table Detail with the above information.
- Multiply the Range Amount by
the percentage specified for the Earning/Deduction (e.g.
100%).
- The calculation will only be done for personnel who
are members of the
fund specified in the detail of the Earning or Deduction. Membership is
maintained "Medical Aid / Group Insurance" {PAOP-5}.
The calculation method is used almost exclusively at global
level.
When
these globals are being defined, it is important to keep in mind
whether the
full monthly premium or only the member's portion is contained in the
lookup table, and whether the contribution by the institution is to be
shown on the payslip or not.
Example:
Let us assume that the table values represent the member's portion of
the monthly premium, that the institution contributes the same
amount, that this amount is taxable, and that it will be shown
on
the
payslip. We must, therefore, define an earning
as 100
percent of the table value, and two deductions of similar
value are paid to the Fund. The pre-tax contribution
occurs
at
level “30”, and the after-tax deductions occur at
level
“72”:
| Appt Type |
21
Full-Time Perm Admin |
| E/D
Code |
3510 Medical SOMS:
Employer Cont (E) |
| Sal.
Level |
30 |
| IRP5
Box |
9999 Non –
IRP5 Total – Not Taxable |
| Calc. Meth. |
5
Medical Aid |
| 2.
Lookup Table |
3
SOMS |
| 3.
Ref. Sal.
Lev. |
0 |
| 6.
Calc. % |
100 |
| 7.
Fund
No. |
SOMS |
| Appt Type |
21
Full-Time Perm Admin |
| E/D
Code |
6250 Medical SOMS:
Payment to Fund (D) |
| Sal.
Level |
72 |
| IRP5
Box |
4005 Medical Aid
Contribution |
| Calc. Meth. |
5
Medical Aid |
| GLA |
F0019318
Work Fund: Medical Scheme |
| 2.
Lookup Table |
3
SOMS |
| 3.
Ref. Sal.
Lev. |
0 |
| 6.
Calc. % |
100 |
| 7. Fund No. |
SOMS |
| Appt Type |
21
Full-Time Perm Admin |
| E/D
Code |
6250 Medical SOMS:
Payment to Fund (D) |
| Sal.
Level |
72 |
| IRP5
Box |
9999 Non IRP5 Total
– Not taxable |
| Calc. Meth. |
5
Medical Aid |
| GLA |
F0019318
Work Fund: Medical Scheme |
| 2.
Lookup Table |
3
SOMS |
| 3.
Ref. Sal.
Lev. |
0 |
| 6.
Calc. % |
100 |
| 7. Fund No. |
SOMS |
The detailed report for deduction “6250” will now
represent
the total payment to the Fund, with two entries per member.
If
the table contained the total contribution to the fund, the above
percentages would change to “50”.
Should the institution prefer not to show its contribution on the
payslip, the two pre and post-tax contra-transactions would have to be non-printable
in order to hide this. However, since one E/D code cannot be
both
printable and non-printable, two deduction codes
representing (respectively) the member's and institution's
contribution,
are now required: hence there will be two lists of
deductions, each representing half the
contribution to the fund.
Note that the South African Medical Aid Fringe Benefit, Tax Credit and
Additional Tax Credits are calculated by a procedure (f84pkg). Refer to
the
on-line help of the procedure - om_f84pkg.html for more detail.
|
| 6
- Pct. of Transaction |
With
the
exception of the
“Advised Amount” (calc method
“3”), this calculation
method is probably the most widely used.
An earning or deduction can be specified as a percentage of another
Earning or Deduction that is defined at a specific reference salary
level.
The reference transaction should always be specified at a lower
salary level than as the Earning or Deduction referring to it
A typical example is an allowance that consists of taxable and
non-taxable components.
- A total allowance is individually advised
for those
employees that qualify, and the allowance components are calculated at
global level as percentages of this individual transaction.
Refer to the discussion of calculation method J below for an example of
how to use using
calculation method 6. |
| 7
- Salary Notch |
This calculation method will use the employee's
Salary Notch recorded in the Salary Notch Records in the Fixed Salary
Detail {FPRI-1}.
The
last Salary Notch Record with an Effective Date smaller than the last
day of the Payroll Cycle, as set up in Dates for Payroll Cycles {FPRM-21} will be used.
The Salary Notch will be divided by 12 for a basic salary amount in a
full month worked.
Reduced monthly income for “short” appointment and resignation months
may be calculated as follows:
- Defining the number of working days per month {FPRM-1}, if defined the Salary
Notch will be pro-rated as follows – Salary Notch / 12 months / value
entered on {FPRM-1} (i.e.
21.67 or 23.83 etc) * number of working days in service for the partial
month
OR
- Calculating
the number of calendar days in service for the partial months follows -
Salary Notch / 365 calendar days * number of calendar working days in
service for the partial month. In this case the field on {FPRM-1} must remain
blank
An example of the global
Earning would be:
| Appt
Type |
21
Full-Time Perm Admin |
| E / D
Code |
0001
Basic Salary - Perm Staff (E) |
| Sal.
Level |
0 |
| IRP5
Box |
3601
Income - Taxable |
| Calc.
Meth. |
7
Salary Notch |
- Calculating the number of working days per month
using a
hard coded 264 days per annum. Field 6, "Indicator for
working
days" is set to 1, the system will use the formula Number of
Days
Worked - Salary Notch /264 * Working Days in service for the
partial month.
In this case the field on {FPRM-1}
must remain blank.
| Appt
Type |
21
Full-Time Perm Admin |
| E / D
Code |
0001
Basic Salary - Perm Staff (E) |
| Sal.
Level |
0 |
| IRP5
Box |
3601
Income - Taxable |
| Calc.
Meth. |
7
Salary Notch |
| 6.
Indicator for working days |
1 |
|
| 8
- Quantity * Amount |
This
calculation method allows for easy
maintenance of claims that can be calculated as number of
hours at a
given hourly rate. It is invariably used at individual level,
e.g. a student who claims for 20 hours of laboratory assistance at
R30-00
per hour:
| Pers.
No. |
3
A Samuels |
| E / D
Code |
0300 Laboratory
Assistance (E) |
| Sal.
Level |
1 |
| IRP5
Box |
3601 Income - Taxable |
| Calc. Meth. |
8
Quantity * Amount |
| Start
Date |
01-MAR-90 |
| End
Date |
31-MAR-90 |
| 1.
Adv. / Ref. Amt |
30.00 |
| 5.
Quantity |
20 |
|
| 9
- Workman's Compensation |
This
calculation method: adds amounts
for all Earnings and Deductions, calculated at a lower salary
level where the field "Include in WCA", as entered
in "Earning / Deduction Types" {FPRG-6}
is equal to (Y)es; is based on actual earnings, if a person
is employed for a portion of a month only.
| Workman's Compensation is also referred to as
COIDA (Compensation for Occupational Injuries and Diseases) |
- Lookup Table 9996 is used to determine the Low Limit,
High Limit, the maximum COIDA amount payable and the
Calculation Percentage
- For backwards compatibility with
earlier versions, the Lookup Table can be left blank
in which case Low Limit, High Limit, Adv / Reference Amount
and Calculation Percentage must be entered.
- The maximum WCA
payable is then specified in the Adv / Reference Amount
Two global E / Ds may be setup to specify the contribution to
a
"Workman's Compensation Fund" on behalf of the employer, as
follows:
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
4100 WCA: Employers
Contribution (E) |
| Sal.
Level |
91 |
| IRP5
Box |
9999 Non IRP5 Total
– Not taxable |
| Calc. Meth. |
9
Workman's Compensation |
| Low
Limit |
|
| High
Limit |
|
| 1.
Adv. / Ref. Amt |
|
| 2. Lookup table to be Used |
9996 |
| 6.
Calc. % |
.15% |
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
5900 WCA: Payment to
Fund (D) |
| Sal.
Level |
91 |
| IRP5
Box |
9999 Non IRP5 Total
– Not taxable |
| Calc. Meth. |
9
Workman's Compensation |
| Low
Limit |
|
| High
Limit |
|
| GLA |
F0019341
Work Fund: WCA Control |
| 1.
Adv. / Ref. Amt |
|
| 2. Lookup Table to be used |
9996 |
| 6. Calc. % |
15% |
Should the institution not wish to show their contribution on the
payslip, both transactions would be non-printable.
|
| A
- Pension |
A
pension fund
is defined by a short table, setup in the Lookup Table Detail {FPRG-5} which
can distinguish between male and
female in the Status-field. The lookup table, as well as the pension
fund to be used, is indicated on the setup of the Earning / Deduction,
as
in the examples below.
The amount is calculated as follows
- If field 4 "Use RFI to Calc. Pension" is set to (N)o,
the salary level total (refer to calc
method 1)
at the reference salary level, as in the set-up is used.
- If field 4 "Use RFI to Calc. Pension" is set to
(Y)es, the
cumulative total of all Earnings / Deductions, where the Retirement
Funding Indicator (RFI-Indicator) is (Y)es, up to the reference salary
level specified, is used.
- If "Look at Notch", in the Funds Detail {FPRG-3},
is set to (Y)es, field 4 "Use RFI to Calc. Pension" will be ignored and
the salary notch of the person, as in the Fixed Salary Detail {FPRI-1}, will be divided by 12,
so as to obtain the amount.
If "Look at Notch", in the Funds Detail {FPRG-3},
is set to (N)o, and the person is not in service for the full month,
the amount will be prorated according to the number of days in service.
This calculation method will calculate pension amounts for
personnel members
- linked to the Pension Fund in Personnel Pension
Detail {PAOP-4}, from
where Membership Numbers are also obtained;
- where the field "Type", on the Appointment
Type {FPRG-10} of the
Service Record {PBOP-2},
is indicated as (P)ermanent.
Three globals are required to define the pension transactions, namely:
the pre-tax contribution by the member, and the two contra transactions
representing the institution's contribution of 2,04 times that of the
member:
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
5000 Pension Fund
1: Employee Cont. (D) |
| Sal.
Level |
40 |
| IRP5
Box |
4001 Current Pension |
| Calc. Meth. |
A
Pension |
| GLA |
F0019312
Work Fund: Pensions Control |
| 2. Lookup
Table |
10
Pension Fund 1 |
| 3. Ref Sal
Lev |
10 |
| 4. Use
RFI to Calc Pension (Y / N) |
N |
| 6. Calc. % |
100 |
| 7. Fund No. |
PGI Pension Fund |
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
3000 Pension Fund
1: Employer Cont (E) |
| Sal.
Level |
70 |
| IRP5
Box |
9999 Non IRP5 Total |
| Calc. Meth. |
A
Pension |
| 2.Lookup
Table |
10
Pension Fund 1 |
| 3.Ref Sal
Lev |
10 |
| 4.Use RFI
to Calc Pension (Y / N) |
N |
| 6.Calc. % |
204 |
| 7.Fund
Number |
PGI
Pension Fund |
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
5001 Pension Fund
1: Employer Cont (D) |
| Sal.
Level |
70 |
| IRP5
Box |
9999 Non IRP5 Total |
| Calc. Meth. |
A
Pension |
| GLA |
F0019312
Work Fund: Pensions Control |
| 2.Lookup Table |
10
Pension Fund 1 |
| 3.Ref Sal
Lev |
10 |
| 4.Use RFI
to Calc Pension (Y / N) |
N |
| 6.Calc. % |
204 |
| 7.Fund Number |
PGI Pension Fund |
|
| B
- Unemployment Insurance Fund (UIF) |
This
calculation
method adds amounts
for all Earnings and Deductions calculated at a lower salary
level where the field "Include in UIF", as entered
in "Earning / Deduction
Types" {FPRG-6}
is equal to (Y)es; it is
based on actual earnings if a person is employed for a portion of a
month only:
- Lookup Table 9994 is used to determine the
Minimum- and Maximum Contribution Ceiling
- For backwards compatibility with
earlier versions, the
Lookup Table can be left blank in which case the Minimum- and
Maximum Contribution Ceiling must be entered into the Low
Limit and High Limit
- Due to the way that the E/D codes are setup and
because there is an employer and employee contribution the %
contribution must still be setup.
The calculation method looks at potential monthly income if a person
was
employed for a portion of a month only.
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
4150 UIF:
Employers Contribution (E) |
| Sal.
Level |
90 |
| IRP5
Box |
9999 |
| Calc. Meth. |
B
Unemployment Insurance |
| Low
Limit |
|
| High
Limit |
|
| 2. Lookup Table to be used |
9994 |
| 6.
Calc. % |
1.0 |
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
5850 UIF:
Payment to Fund (D) |
| Sal.
Level |
90 |
| IRP5
Box |
9999 Non-IRP5 Total |
| Calc. Meth. |
B
Unemployment Insurance |
| Low
Limit |
|
| High
Limit |
|
| GLA |
F0019340
Work Fund: UIF Control |
| 2. Lookup Table to be used |
9994 |
| 6.
Calc. % |
2.0 |
|
| C
- Group Insurance (Exact) |
This
calculation method can distinguish between male and female, if desired.
Group schemes are typically specified by a formula, which calculates
the
monthly or annual premium, as y cents per R1000 cover, where cover is
{annual notch x cover factor}.
The above formula must be treated as follows so as to allow for
calculation of
monthly premiums by the system:
- The monthly or annual premium must be converted to a
percentage of monthly basic salary.
- The percentage is then specified in the
table. Hence, if the monthly basic salary is multiplied by
this percentage,
the result is the monthly premium.
- This
premium is then further multiplied by a
percentage, specified in the detail of the E / D. to arrive at the
monthly
contribution for the employee and council respectively. (The
value of this percentage depends on whether the full contribution
or only the employee's contribution has been specified in the table.)
An example follows:
Scheme rules are:
Cover factor is equal to 3
Monthly contribution for every amount of 1 000 covered is 0,332
Assume annual salary = 29220, therefore cover = 3 x 29220 = 87660
Thus monthly contribution = (87660 / 1000) x .332 = 29.10
We must now find the percentage of monthly basic this represents:
Monthly basic is 29220 / 12 = 2435;
Hence percentage = (29.10 / 2435) * 100 = 1.195078 =
1.1951% (to 4 dec).
Monthly premium = 2435 x 1.1951 / 100 = 29.100685 = 29.10 (rounded)
The table in "Look-up Table Detail" {FPRG-5}
does not allow more than 3 decimals. This is dealth
with by
loading
the table with a value that is 10 times bigger, and loading a
percentage in the global "Earning / Deduction Detail" {FPRG-7} that is 10 times
smaller.
Please refer to the on-line documentation of "Funds Detail" {FPRG-3} for comments regarding
the treatment of entry, and resignation months with respect to Group
Schemes.
Membership numbers are obtained from records in "Medical /
Group Insurance" {PAOP-5},
for purposes of printing these on detailed reports to send to Fund
Administrators.
The global transaction for a fully contributory Group Scheme would be:
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
6310 Group Life
Insurance: Fund 2 (D) |
| Sal.
Level |
74 |
| IRP5
Box |
9999 Non-IRP5 Total |
| Calc. Meth. |
C
Group Insurance (Exact) |
| GLA |
F0019320
Work Fund: Group Insurance |
| 2.
Lookup Table |
21
Group Insurance Fund 2 |
| 3.
Ref. Sal.
Lev. |
0 |
| 6.
Calc. % |
100 |
| 7.
Fund Number |
G2
Group Insurance Fund 2 |
|
| D
- Unpaid Days |
This
method can calculate unpaid leave based
on Calendar Days or Working Days, depending on the requirement.
To calculate the amount, a Yearly
Salary calculated as follows is used.
- If field 3 "Reference Salary Level" is entered,
twelve times the salary level total (refer to calc method 1)
at the reference salary level, is used.
- Otherwise the salary notch of the person,
as in the Fixed Salary Detail {FPRI-1},
is used.
Calculation on
a Calendar Days basis:
The "indicator for working days" in Individual Earnings / Deductions {FPRI-2} or Global Earning /
Deduction Detail {FPRG-7} must
have a null value, ie nothing must be entered in this field.
The number of working days per year is fixed at 365 days.
Quantity x Daily Rate of Pay
Where
Daily Rate = Yearly Salary / 365
Calculation
on a working days basis:
The "indicator for working days", in Individual Earnings /
Deductions {FPRI-2} or
Global Earning / Deduction Detail {FPRG-7}
must
have, any numerical value in the range 0 to 9,
for example, "1" can be entered in this field.
The number of working days per year is fixed at 264 days.
Quantity x Daily Rate of Pay
Where
Daily Rate = Yearly Salary / 264
If the appropriate deduction from basic salary is specified at salary
level “1” (assuming that basic salary lies at level
“0”), pension and PAYE will be calculated on the
reduced
amount, but medical aid and group insurance (assuming they refer to
notch) will be calculated as normal.
An individual transaction could be:
| Personnel
No |
3
Q
Gordon |
| E / D
Code |
7400 Overpaid Salary
Recovery (D) |
| Sal.
Level |
1 |
| IRP5
Box |
3601 Income - Taxable |
| Calc. Meth. |
D
Unpaid Days |
| Start
Date |
01-MAR-90 |
| End
Date |
31-MAR-90 |
| GLA |
60100201
Logistical Services: Salaries |
| 3. Ref Sal Lev |
|
| 5.
Quantity |
12 |
Note
the start and end dates. |
| E
- Overtime Hours |
Overtime
hours are calcuated as:
- Rate Percentage x Quantity x Hourly Rate of Pay
- Where
Hourly Rate of Pay = Yearly Salary / Hours
The Yearly Salary calculated as follows is used.
- If field 3 "Reference Salary Level" is entered,
twelve times the salary level total (refer to calc method 1)
at the reference salary level, is used.
- Otherwise the salary notch of the person,
as in the Fixed Salary Detail {FPRI-1},
is used.
The Hours are defined on menu option {FPRM-1}
page 2.
- If salary is calculated based on calendar days the
hours must be calculated as follows:
Hours = (365 * 8) = 2920
- If salary is calculated based on
working days the hours must be calculated as follows:
Hours = (Number of Working Days in a Year * 8)
The number of working days for the calculation of the monthly salary
and unpaid leave is fixed at 264; and therefore it is suggested that
this
number of days is retained for overtime calculated based on working
days.
(264
* 8) = 2112 (hours for working days)
The Integrator system only caters for one set of hours depending on the
hours advised in the Institution Details {FPRM-1}.
“Rate Percentage” would typically be 100% (normal
overtime), 125% (time-and-a quarter), 150% (time-and a half),
etc. The system defaults to 100%.
If the institution calculates “Hourly
Rate” by
means of a
formula different from the above, the “Rate
Percentage” has
to be prorated to values different from 100%, 125%, etc.
- E.g., if the Yearly Salary should be divided by 52 *
38.5 =
2002 instead of 365 * 8 = 2920, the standard formula will calculate an
hourly rate which is too small.
- If the percentages are increased by a factor 2920 /
2002 =
1.45854, i.e. 100% -> 145.854%, etc., the standard formula gives
the
correct result.
It is possible to limit the payment of overtime to people with certain
post grades, by specifying the lower and higher grades as the
“Low Limit Amount” and “High Limit
Amount”.
- If a person claims overtime and his / her grade falls
outside
these limits, the system will reject the transaction with an error
message.
- If these fields are left blank, or if the person has
no
post grade, this check will not be done. The same grade may
be
entered in both fields.
It is also possible to
limit the maximum overtime rate to be used for
the calculation of overtime to the Threshold Amount defined in the
Basic Conditions of Employment Act (BCA) applicable to South Africa.
This means that an employee's earnings will be used for the calculation
of overtime (either determined by Notch or Total Earning for a salary
level, depending on user defined setup) where the earnings are less
than or equal to the Threshold defined. When the earnings exceed the
Threshold amount defined, the Threshold amount will be used to
determine the hourly rate. To use this functionality define the
Threshold Amount in field 1.
An individual transaction could be:
| Personnel No |
3
Q
Gordon |
| E / D
Code |
0050 Overtime Pay -
Perm Staff (E) |
| Sal.
Level |
1 |
| IRP5
Box |
3601 Income - Taxable |
| Calc. Meth. |
E
Overtime Hours |
| Start
Date |
01-MAR-90 |
| End
Date |
31-MAR-90 |
| Low
Limit |
14 |
| High
Limit |
15 |
| GLA |
60100201
Logistical Services: Salaries |
| 1 |
205433.30 |
| 3. Ref Sal Lev |
|
| 5. Quantity |
25 |
| 6. Calc.
% |
150 |
GHANA
CLIENTS
Calc Method E may be used to calculate Overtime payments (Rate X
Quantity) where the
PAYE on Overtime is calculated programmatically as a
separate transaction to the standard PAYE.
In this case
- Tax
Code
13
(Overtime Payments) must be linked,
- Salary Level must be > 50,
in
addition
to (J)unior, (S)enior or (N)on Resident being defined in field
‘7’ when linked
to Individual Transactions {FPRI-2}.
PAYE on Overtime will be
calculated
using Calc Method I Function CALC_OT_TAX($L0,EDXXXX)
|
| F
- General Lookup Table |
This
calculation
method is similar to Calculation Method
“5” above, except that the reference amount
is not a
salary level total, but an advised amount.
This also implies that it would be used at individual rather than
global level, and hence there is no linking to a fund, nor is the
method sensitive to marital or other status or number of dependants.
A typical usage example would be the lookup of the taxable value of the
private
use of an employer-supplied motor vehicle.
- The user maintains tables as supplied by the Receiver
of Revenue.
- The value of the vehicle and the table, which
corresponds
to its engine capacity, are specified at individual level for the
employee.
- The actual engine capacity and registration number
can be
entered in the “Reference Number” field for
permanent
reference.
- The value of the vehicle is specified as the
“Advised Amount”.
Both the pre-tax earning and post-tax contra deductions would be
non-printing items on the payslip.
Rebates for own fuel and maintenance are also dealt with via
this calculation
method for ease of updating when these rebates change, the
“Advised Amount” being specified as
“0”.
Other relevant deductions, e.g. monthly payment to employer for rental
of vehicle and GST, insurance, and maintenance contract, are specified
as Advised Amounts via Calculation Method “3”.
The individual transaction could be:
| Personnel No |
3
Q Gordon |
| E / D
Code |
0030 Vehicle Subsidy
(E) |
| Sal.
Level |
49 |
| IRP5
Box |
3601 Income - Taxable |
| Calc. Meth. |
F
General Lookup Table |
| Start
Date |
01-MAR-90 |
| Ref. Number |
1800:
CB34334 |
| 1.
Adv. / Ref. Amt |
34700.00 |
| 2.
Lookup Table |
2000
1601 - 2000cc |
| 6.
Calc. % |
100 |
|
| G
- Group Insurance (Next R100) |
This
calculation
method can distinguish between male and female, if desired.
It differs from Calculation Method “C” in that the
cover
is
rounded off to the next R100 before the annual premium is
calculated.
Also, the “cover multiplier” (e.g. 4) must be
specified in the “Quantity” field of the
E / D.
The system will then:
- Calculate the cover as annual notch x multiplier,
rounded off as required.
- Apply the annual premium in Rands per R10 000 (which
is
specified in the “Percentage” field in the table)
to arrive
at a monthly premium.
- Multiply the premium by the percentage,
which is
specified in the detail of the E / D to arrive at the monthly
contribution.
Membership numbers are obtained from the membership records, as
specified in option {PAOP-5} of the Personnel System, for purposes
of display on
detailed reports sent to Fund Administrators.
The global transaction would be:
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
6330 Group Life
Insurance: Fund 4 (D) |
| Sal.
Level |
74 |
| IRP5
Box |
9999 Non-IRP5 Total |
| Calc. Meth. |
G
Group Insurance (Next R100) |
| GLA |
F0019320
Work Fund: Group Insurance |
| Ref.
Number |
DAYS.MAX.........UPL |
| 2.
Lookup Table |
31
Group Insurance Fund 4 |
| 3.
Ref. Sal.
Lev. |
1 |
| 5.
Quantity |
5 |
| 6.
Calc. % |
100 |
| 7.
Fund Number |
G4
Group Insurance Fund 4 |
|
|
I - Custom Formula |
This calculation
method will use a formula, entered by the user in the Formula
- field.
The formula can contain the
following
- Any constant value (e.g. -1.15)
- The normal arithmetic symbols (+, -, * and / )
- A reference to a salary level total, indicated by
"$LT"
- For example if $LT12 is in the formula, the total
at salary level 12 will be used
- A reference to the value of an earning / deduction at
a
specific salary level, indicated by "$Lx,EDy", where x is the salary
level and y is the earning / deduction code
- For example if $L9,ED0115 is in the formula, the
value of earning / deduction 0115 at salary level 9 will be used.
- A reference to the personnel number, indicated by "$P"
- Single Row Functions, for example
- Greatest(x,y,z), Least(x,y,z), where a, b, x, y
and z are expressions made up of the above
- Case Statements, for example
- CASE
WHEN a > b THEN x
WHEN a = b THEN y
WHEN a < b THEN z
END
As an example, the way the formula below will be calculated is as
follows:
| Formula |
Calculation |
| $LT3 * 1.5 |
Total at Salary Level 3 times 1.5 |
| ($LT3 * 1.5) - $L7,ED0160 |
(Total at Salary Level 3 times 1.5) minus the
value of Earning/Deduction 0160 at Salary Level 7 |
| GREATEST($LT3 * 1.5, $L4,ED4225,1000) |
The greatest of
- Total at Salary Level 3 times 1.5
- Value of Earning/Deduction 0160 at Salary Level
7
- 1000
|
CASE
WHEN $L2,ED0015 >
$L3,ED0050 THEN 100
WHEN $L2,ED0015 = $L3,ED0050
THEN 0
WHEN $L2,ED0015 <
$L3,ED0050 THEN -100
END |
- If the Earning/Deduction 0015 at
Salary Level 2 is more than Earning/Deduction 0050 at Salary Level 3
then 100
- If the Earning/Deduction 0015 at
Salary Level 2 is equal to Earning/Deduction 0050 at Salary
Level 3 then 0
- If the Earning/Deduction 0015 at
Salary Level 2 is less than Earning/Deduction 0050 at Salary Level 3
then -100
|
Calculation Method ‘I’ is used extensively in a
Cost-to-Company (CTC) setup to calculate numerous components of the CTC
structure for the employee.
The total CTC Annual Package should be captured in the
‘Notch’ field in addition to the Pensionable
Percentage of
the Package in the ‘Pensionable % of CTC’ field for
the
employee on Fixed Salary Detail {FPRI-1
pg5}.
Calculation of
Pensionable Salary
| Formula |
Calculation |
| ROUND($L0,EDP001*($RFP/100),2) |
The value of ED Code ‘P001’
on Salary Level ‘0’ multiplied by the Pensionable
Percentage entered on {FPRI-1 pg5},
rounded to 2 decimals |
Calculation of Employer’s Contribution to a Medical Aid Fund
| Formula |
Calculation |
CASE '$MED' WHEN 'BON' THEN
$FB_ED_AMT WHEN 'BCOM' THEN
$FB_ED_AMT WHEN 'BCPL' THEN
$FB_ED_AMT WHEN 'BBCL' THEN
$FB_ED_AMT ELSE 0 END |
The amount of the Employer’s
Contribution to a Medical Aid Fund (as defined in the formula); used by RSA clients only.
Multiple Medical Aid Fund codes may be defined in a single formula and
examples used in this case are ‘BON’,
‘BCOM’,
‘BCPL’ and ‘BBCL’
Rules for calculation:
- The Medical Aid Fund Code must be defined on {FPRG-3} as Fund Type
‘M’
- Calculation method ‘U’ of
‘5’ must be used to calculate the Medical Aid
transactions
- Fringe Benefit on the Employer’s
Contribution must be part of the transactions calculated for Medical
Aid
- Medical Aid ED Structure must be defined on {FPRG-8} for the Fund Code
- Employee’s who have an active Medical
Aid Fund membership for a Fund Code defined in the formula will
calculate
|
Calculation of Employer’s Contribution to a Pension or
Provident Fund
| Formula |
Calculation |
CASE ''$FUN'' WHEN ''NTRF'' THEN
ROUND($L2,EDP002*.16,2) WHEN
''AFRF'' THEN
ROUND($L2,EDP002*.15,2) ELSE 0
END |
The amount of the Employer’s
Contribution to a Pension or Provident Fund
Multiple Pension /Provident Fund Codes may be defined in a single
formula and examples used in this case are Fund Codes
‘NTRF’ and ‘AFRF’
Rules for calculation:
- The Pension or Provident Fund Code must be
defined on {FPRG-3} as
Fund Type ‘P’ or ‘V’
- Employee’s who have an active Pension
or Provident Fund membership for a Fund Code defined in the formula
will calculate
Example of calculation for an employee linked to Fund Code
‘NTRF’
Amount calculated for ED Code ‘P002’ on Salary
Level ‘2’ multiplied by 16%, rounded to 2 decimals |
Calculation of Bonus Provision
| Formula |
Calculation |
CASE WHEN $BONM IN (10,11,12) THEN
ROUND($L2,EDP002/12,2)
ELSE 0 END |
Where a Bonus Month exists for an Employee on {FPRI-1 pg2} and the Bonus Month
has been defined in the formula (in the example used Bonus Month 10, 11
and 12 have been defined).
Example of Calculation where Bonus Month of Employee = Bonus Month
defined in the formula
Amount calculated for ED Code ‘P002’ on Salary
Level 2 divided by 12, rounded to 2 decimals |
Calculation of Non Pensionable Amount
| Formula |
Calculation |
($L0,EDP001-$L2,EDP002-
$L3,EDP003-$L3,EDP004-
$L3,EDP005-$L3,EDP006-
$L3,EDP007-$L3,EDP009) |
The amount calculated for ED
‘P001’ minus the CTC Component ED Codes calculated,
in the example used:
ED Code ‘P002’ on Salary Level 2
ED Code ‘P003’ on Salary Level 3
ED Code ‘P004’ on Salary Level 3
ED Code ‘P005’ on Salary Level 3
ED Code ‘P006’ on Salary Level 3
ED Code ‘P007’ on Salary Level 3
ED Code ‘P009’ on Salary Level 3 |
GHANA CLIENTS
Calculation of PAYE on Overtime Payments (applicable to Ghana Clients
Only)
The
PAYE marginal rate applied to Overtime Payments vs. standard salary
payments may differ depending on a number of factors (Annual
Emoluments, Junior, Senior, Non-Resident etc.). In order for
the
Overtime to be calculatde programmatically as a separate transaction to
the standard PAYE calculation, the following is to be defined:
- Overtime
Transactions to be calculated using Calc Method ‘3’ (Advised Amount) or
Calc Method ‘E’ (Overtime Payments, rate X quantity)
- Tax Code 13 (Overtime)
- Salary Level >50 (i.e. after the standard PAYE
Calculation)
- (J)unior, (S)enior, (N)on-Resident indicator set in
field 7
- A
separate ‘PAYE on Overtime’ transaction, Tax Code 15 (PAYE), Salary
Level > Overtime Transactions, Calculation Method ‘I’ (Formula)
,
function $CALC_OT_TAX($L0,EDA001) is to be defined
| Formula |
Calculation |
$CALC_OT_TAX($L0,EDXXXX)
|
The
Basic Salary is determined from the ED Code defined in the formula,
this is used in the calculation of the PAYE on Overtime (i.e. where the
employee is a Junior, and Annual Emoluments are < 18 000pa then
overtime up to 50% of basic salary is taxed at 5%, thereafter at 10%)
This formula is applicable to Ghana Clients only
|
|
| J
- Difference Between Transactions |
This
calculation
method can be used to
avoid rounding errors when an amount must be split into two on a
percentage basis, e.g. when a subsidy or allowance must be divided into
pre-tax and post-tax components.
An earning or deduction can be specified as the difference between two
other E / Ds which are defined at specific lower salary
levels.
As an example; consider a travel allowance of which 35% is taxable.
- The allowance is advised after tax at individual
level, and
is non-printable on the payslip - it will merely be used to calculate
the pre and post-tax portions of the allowance.
- At global level we can specify the pre-tax portion of
35% as a percentage of this advised amount
- Also at global level, we specify the post-tax portion
of 65% as the difference between the advised amount and the 35%.
- We also need to contra the advised amount with a
non-printable after-tax transaction = 100% of the allowance.
The set of four transactions would be:
| Personnel
No |
3
Q Gordon |
| E / D
Code |
2000
Travel Allow (Advised Control) (E) |
| Sal.
Level |
80 |
| IRP5
Box |
9999
Non-IRP5 Total |
| Calc.
Meth. |
3
Advised Amount |
| GLA |
F0019339
Work Fund: Advised Allow Control |
| 1.
Adv. / Ref. Amt |
800.00 |
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
1100 Travel
Allowance (Taxable) (E) |
| Sal.
Level |
13 |
| IRP5
Box |
3701 Traveling and
Subsistence Allowance |
| Calc. Meth. |
6
Pct. of Transaction |
| GLA |
0211 Staff Benefits
(Bonus) |
| 3.
Ref Sal
Lev |
80 |
| 4.
Ref E / D code |
2000
Travel Allow (Advised Control) |
| 6.
Calc. % |
35 |
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
2200 Travel Allow
(Non-taxable) (E) |
| Sal.
Level |
60 |
| IRP5
Box |
3701 Traveling and
Subsistence Allowance |
| Calc. Meth. |
J
Difference between
Transactions |
| 3.
Ref. Sal.
Lev. |
80 |
| 4.
Ref E / D
code |
2000
Travel Allow (Advised Control) |
| 5.
Quantity |
13 |
| 6.
Calc. % |
100 |
|
7. Fund
Number |
1100
Travel Allowance (Taxable)its_man_img/fprg-7sister2.jpg |
| Appt Type |
21
Full-Time Perm Admin |
| E / D
Code |
6900 Travel / Allow
(Deduct Ctrl / 2000) (D) |
| Sal.
Level |
81 |
| IRP5
Box |
9999 Non IRP5 Total |
| Calc. Meth. |
6
Pct. of
Transaction |
| GLA |
F0019339
Work Fund: Advised
Allow Control |
| 3.
Ref. Sal.
Lev. |
80 |
| 4.
Ref E / D
code |
2000
Travel Allow (Advised Control) |
| 6.
Calc. % |
100 |
Of course, if a person does not receive an allowance, none of the
globals
would be active in his / her case since all of them refer to the
individual advice. |
| K
- Sum of Transactions |
This
calculation method can be used to avoid
rounding errors when two amounts must be
added to one earning / deduction.
An earning or deduction can be specified as the sum of two other E /
D's
which are defined at specific lower salary levels.
| Personnel
No |
3
Q Gordon |
| E / D
Code |
0050
Special Allowance |
| Sal.
Level |
35 |
| IRP5
Box |
3601
Income - Taxable |
| Calc.
Meth. |
K
Sum Of Transactions |
| 3.
Ref. Sal
Lev |
30 |
| 4.
Ref.
E / D
code |
0010
Once-off Earning |
| 5.
Second Ref. Sal. Lev. |
21 |
| 7.
Second E / D
code |
0012
Gift |
|
| L
- Medical Aid: Age Range |
This
calculation method is exactly to the same as method
“5”, but is intended for those
Medical
Aid Funds which do not determine premiums on the basis of monthly
income, instead the determination is based on the member's age at the
end of the month for which the
premium is due.
When the tables are created for these funds, the fields “Low Limit Amount”
and “High
Limit Amount”
in "Individual Earnings / Deductions" {FPRI-2} should contain the lower
and upper values of the various age brackets, e.g. 0 -> 30; 31
->
50; 51 -> 999. |
| M
- Medical Aid: Age and Spouse Age |
Not
in Use. |
| N
- National Insurance |
Not
in Use. |
| P
- Prorated Advised Amount |
Prorated
Advised Amount functions
exactly like Method 3, but multiplies the advised amount by the
fraction of the month that the person was in service.
| Personnel
No |
3
Q Gordon |
| E / D
Code |
2100
Traveling Allowance (Advised Control) |
| Sal.
Level |
90 |
| IRP5
Box |
9999
Non-IRP5 Total |
| Calc.
Meth. |
P
Prorated Advised
Amount |
| GLA |
F0019322
Work Fund: Pers Ins
Deduction |
| Ref.
Number |
GOR /
33-743-77 |
| 1
Adv. / Ref.
Amt. |
1005.00 |
|
| S
- Stabilisation Fund Deduction |
This
calculation method is similar
to calculation method '6', as described above, except that: it may only
refer to calculation method '2', i.e. “Bonus”
and it must be
calculated at a salary level higher than the bonus.
The stabilisation fund deduction is calculated as a percentage of
either the maximum possible bonus or the actual bonus paid, according
to the rules as specified in calculation method '2'.
Please note that, in order to remain compatible with earlier versions
of
the System, calculation method 'S' is stored in the transaction file as
calculation
method '2'. It is, however, shown as calculation method 'S'
on the
Pro-forma Payslip and the Full Calculation Report. |
| T -
Additional Voluntary Tax |
This
calculation method works in a similar manner to Calculation Method 3
and is used
for
Additional Voluntary Tax deductions. Transactions done with this
calculation
method will be included in the calculation of PAYE, but not
SITE.by Generate IRP5 and IT3A {FPRT-1},
used by
South African Institutions.
|
| U
- Medical Aid – Local Software |
This
method is
reserved to allow the use of "Local Software" calculation rules for
Medical Aid Contributions.
It may be designed to deal with different ways of looking up
Medical
Aid premiums from tables using varying lookup parameters, and also to
handle different methods of calculating Employer contributions (e.g. a
percentage of total, or a percentage of a standard fund, regardless of
the fund to which the individual staff member belongs, or a fixed
contribution amount, referred to as an allowance. |
| V
- Skills Levy |
This
calculation
method adds amounts for all Earnings and Deductions
calculated at a lower salary level, where the field "Skills
Levy", as
entered in "Earning / Deduction
Types" {FPRG-6}
is equal to (Y)es
and is based on actual earnings if a person is employed for a
portion of a month only. - Lookup Table 9995 is used to determine the Calculation Percentage
- For backwards compatibility with
earlier versions, the Lookup Table can be left blank
in which case Calculation Percentage must be entered
As an example: to calculate Skills Levies, the following Earning /
Deductions should be defined and linked to the global Earning /
Deduction
Detail:
- An E / D code for Skills Levy must be defined
- An ED Code calculating VAT on Skills Levy
- A Contra ED Code (Calculation method K)
| Appt Type |
1 |
| E / D
Code |
SKL1 (E) |
| Sal.
Level |
96 |
| IRP5
Box |
|
| Calc. Meth. |
V |
| GLA |
0211 Staff Benefits
(Bonus) |
| 2. Lookup Table to be used |
9995 |
| 4.
Reference E / D
Code: |
SKL2 |
| 6.
Calc. % |
|
| Appt
Type |
1 |
| E / D
Code |
SKIL2
(E) |
| Sal.
Level |
97 |
| IRP5
Box |
3601
Income - Taxable |
| Calc.
Meth. |
3 |
| 1.
Advised amount |
.14
(VAT rate) |
| Appt Type |
1 |
| E / D
Code |
SKIL3 (D) |
| Sal.
Level |
98 |
| IRP5
Box |
|
| Calc. Meth. |
K |
| GLA |
MAC1 0607 |
| 3. Reference Salary
Level: |
96 |
| 4. Reference E / D
Code |
SKIL1 |
| 5. Second Reference
Level |
97 |
| 7. Second E / D
Code |
SKIL2 |
|
| W
- Packaged Salary |
This
calculation method has been
created to calculate a pre-tax
calculation of the Taxable Cash Benefit portion of the
salary package of employees with
structured salary
packages.
fprg-25.html 213274
For structured packages, we recommend that the notch of
the employee represents that employee’s entire
salary
package, which may be made up of various different earnings (and even
some deductions).
This calculation method is typically used to calculate a "Cash Benefit"
to be displayed on the payslip of a personnel member.
fprg-25.html 213274 fprg-25.html 213274
This calculation method will add or subtract the amounts of
all
Earnings and Deductions calculated at a lower salary level that is
linked to the package rules for the Appointment Type {FPRG-10} in the "Package
Definition" {FPRG-27}.
A field "Operand Indicator" may be used to specify whether the amount
is to be added or subtracted. |
| X-Retirement
Fund |
X
– Retirement Fund
This calculation method is used by both South African and Namibian
clients.
South African clients:
Used to calculate a number of salary transactions that form
part of the
Retirement Fund Tax Harmonisation calculation, introduced with effect
from 1st March 2016.
The following Retirement Funding transactions are calculated using
Calculation Method ‘X’:
- Fringe Benefit on Employer’s Contribution
to Retirement Fund
- EE Total Contribution to Retirement Funding >
Allowed Capped Amt /Capped Percentage
- EE Total Contrib to Retirement Funding >
Allowed Capped Amt /Capped Percentage Contra
An example of a typical ED Code setup using Calculation Method
‘X’ is as follows:
E / D Code
2204 FB on
Employer’s Contribution to NTRF Pension Fund (E)
Salary Level
40
IRP5 Box
9998
‘Retirement Reform Code to be Converted’
Calc Method
X Retirement Fund
GLA
Retirement Fund Control
Account
Retirement Fund Indicator
‘N’
ETI Wage Ind
‘N’
Include for WCA?
‘N’
Include for UIF?
‘Y’
Include for Skills Levy
‘Y’
7. Fund Code
NTRF
E / D Code
2200
EE Total Contribution to RF > Allowed Amt /Percentage (E)
Salary Level
49
IRP5 Box
9998
‘Retirement Reform Code to be Converted’
Calc Method
X Retirement Fund
GLA
Retirement Fund Control
Account
Retirement Fund Indicator
‘N’
ETI Wage Ind
‘N’
Include for WCA?
‘N’
Include for UIF?
‘N’
Include for Skills Levy
‘Y’
E / D Code
2201
EE Total Contrib to RF > Allowed Amt /Percentage Contra (D)
Salary Level
64
IRP5 Box
9998
‘Retirement Reform Code to be Converted’
Calc Method
X Retirement Fund
GLA
Retirement Fund Control
Account
Retirement Fund Indicator
‘N’
ETI Wage Ind
‘N’
Include for WCA?
‘N’
Include for UIF?
‘N’
Include for Skills Levy
‘N’
Please Note:
- Tax Code ‘9998’ may only be used
with
Calculation Method ‘X’ and is converted
programmatically to
the applicable SARS Tax Code determined by the type of Retirement Fund
the employee belongs to, for whom the salary calculation is being done
i.e. Pension Fund, Provident Fund or Retirement Annuity.
- For a detailed explanation on Retirement Fund Tax
Harmonisation and the required setup, please refer to
“Retirement
Fund Tax Harmonisation”
Namibian Clients
Used to calculate the amount of pre-tax Retirement Funding (i.e.
Pension Tax Code 13, Provident Fund Tax Code 14, Retirement Annuity Tax
Code 15) the employee had exceeded what is allowed (as per values
linked to Table ‘9998’ on {FPRG-5})
When calculating the amount, the program will sum the Tax Year to-date
pre-tax Retirement Funding Contributions (Tax Code 13, 14 and 15), vs
what is allowed (Table 9998), vs what has been dis-allowed in previous
months to determine what is dis-allowed in the current month as a
pre-tax deduction.
This transaction is for taxation purposes only and should be defined on
Salary Level 49, all other pre-tax Retirement Funding transactions
should be calculated on a salary level <= 48. The
contra entry
(using Calc Method 6) would be defined on a salary level >50.
Please Note:
- Tax Code 13, 14, 15 may only be used with calculation
Method ‘X’
|