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How to pay out additional voluntary tax?

Created on  | Last modified on 

Summary

Sage Pastel Payroll: How do I set up additional voluntary tax, so employee does not pay tax when they get their bonus?

Resolution

NOTE: You needed to process 8005 before the Bonus period in order to do a correction.

Doing the setup in March (or prior to paying the bonus):

  1. Click Process → Payslips
  2. Select the applicable employee.
  3. Make a note of the amount on Transaction code 8001 - PAYE.
  4. Insert the bonus Transaction code 5200 – Annual Bonus.
  5. Enter the expected bonus amount on the Annual Bonus code.
  6. Transaction code 8001 - PAYE will now have increased.
  7. Make a note of this amount.
  8. Remove Transaction code 5200 – Annual Bonus by selecting the transaction code 5200 and select the second icon from the left-hand side, called “Delete line”
  9. If processing in March, and the employee wishes to pay off the Bonus portion of the tax by November, this is 9 months. E.g. If difference was 3000 then that will be 3000 / 9 = R333.33
  10. On the Default tab, Enter Transaction code 8005 – Voluntary Additional Tax.
  11. In the Amount field, enter the value that you calculated.
  12. Save the payslip.

Paying out the Bonus:

When paying the bonus to the employee in the Bonus period:

  1. On the default tab, make the amount for code 8005 zero and make a note of the YTD amount on code 8005.
  2. Click on the deductions tab and Enter in the amount displayed in the YTD column in the Period amount column as a negative value
  3. This will then reverse the Additional Voluntary Tax that was paid for the last months, that will then reduce the value on code 8001 in order for the bonus to be paid out tax free.