Adding a Provision Definition

Access the provision definition setup screen

1. From the Navigation pane:
   • Expand Company Management.
   • Expand Payroll Definitions.
2. Double-click Provisions.
3. The Provision Screen displays.
4. The Provision Definition Detail Screen displays.

Understand the calculation formula

Provision for Tax on Bonus =
(Estimated Bonus – Year-to-date provision amount) ÷ Remaining periods in the tax year

• Estimated Bonus: Select the field where the amount is specified (for example, for a 13th cheque use [EE.ER.PeriodSalary])
• Year-to-date provision: Use PS.PV.CODE.PROV_TAX_BONUS.YTDTotal
• Remaining periods: Use (DateDiffPeriod([PR.EndDate], [EE.ER.AddDate1]) + 1)

Examples

• Example A: The employee earns R6,000 monthly and expects a R6,000 bonus in December.
  Calculation: R6,000 ÷ 12 = R500 provision per month.
• Example B: The employee starts in June and expects a R4,500 bonus in December.
  Calculation: R4,500 ÷ 9 = R500 provision per month.
• Example C: Estimated bonus changed from R6,000 to R9,000 in September.
  Calculation: (R9,000 – R3,000) ÷ 6 = R1,000 provision per month.

Important notes

• Revise the provision regularly to ensure the bonus amount equals the provision in the last tax period.
• The system adjusts tax in the last period to compensate for over- or under-provision.