Process provision for tax on annual bonus for employees
Description
'Provision for tax on annual bonus' allows the employee to spread the tax on a guaranteed bonus over a tax year. The system deducts an additional tax amount for each pay period, instead of taxing the full amount when paid to the employee.
The formula to calculate provision for tax on an annual bonus is (Bonus – Year to date provision amount) ÷ remaining periods in the tax year.
It's important to set up and process of the provision amounts correctly to apply the correct deductions.
CAUTION:
Apply 'Provision for tax on annual bonus' only if the employee receives a guaranteed bonus during the tax year.
Cause
Resolution
Access your payroll company on the Company Listing screen.
From the Main Menu, select Payslip, then Payslip Information.
Select the employee from the list and click Continue.
Enter TAX in the Route to box, then press Enter.
Locate Provision for Tax on Annual Bonus.
If you've created a provision method, link the employee on the dropdown.
For manual input, enter the provision amount in the YTD+ column.
CAUTION:
Don't enter the mount in the YTD Prov for Bonus box. Use this field only when transferring or taking on employee records.
