One employee's tax circumstances for one fiscal year: single or couple, resident or not, what they contribute to, where they are posted and what they have declared.
When to use it
Once a year for each employee whose tax should not be worked out on the defaults. Update it whenever somebody's circumstances change during the year.
Before you start
The employee and the fiscal year must exist. The year's tax rules must be set up on Tax Policy Year for both single and couple.
Where to find it
Open the HR area from the main menu, then HR Setup, then Tax Employee Config.
The fields on this screen
| Field (on screen) | What to enter | Required |
|---|---|---|
| Employee | The employee this tax profile is for. There is one profile per employee per fiscal year. | No |
| Fiscal Year | The fiscal year this profile covers. With no profile for the year, payroll falls back to single and resident. | No |
| Filing Status | Single or couple. Couple uses wider tax bands, so the wrong choice changes the tax deducted every month. | No |
| Resident | Untick for a non-resident. They are then taxed at a flat rate, with no bands, allowances or credits. | No |
| Residency Days | (not explained yet) | No |
| Employment-Only Income | Tick when salary is the employee's only income. The 10 percent woman tax credit needs it ticked. | No |
| Diplomatic Mission | (not explained yet) | No |
| Incapacitated | Tick for an incapacitated resident. It widens the tax-free band, so less tax is deducted. | No |
| Remote Area | Remote area class A to E for this posting. Each class adds a tax-free allowance, A the largest, E the smallest. | No |
| Remote Days | Days spent in the remote area this year. The remote area allowance is scaled by these days out of 365. | No |
| PAN | (not explained yet) | No |
| Spouse PAN | (not explained yet) | No |
| Spouse Filing | (not explained yet) | No |
| Prior Employer Taxable YTD | (not explained yet) | No |
| Prior Employer TDS YTD | Tax already deducted by a previous employer this year. It is taken off before this month's tax is worked out. | No |
| Contributes SSF | Tick when the employee is in the Social Security Fund. Under the seeded rules that waives the 1 percent band tax. | No |
| Contributes EPF | (not explained yet) | No |
| Contributes CIT | (not explained yet) | No |
| Declared Investments (jsonb) | Life, health and building insurance premiums the employee declared. Each is deducted up to its own yearly cap. | No |
| Heading Overrides (jsonb) | (not explained yet) | No |
| Notes | (not explained yet) | No |
How it works
When payroll works out tax, it looks for the record matching the employee and the fiscal year that contains the last day of the pay period.
With no record, everyone is treated as single, resident, with only employment income and no contributions. Leaving the record out is itself a decision. For a married employee it is the wrong one, every month, until somebody notices. Enter a record for every employee whose position differs from that.
What the entries change:
- Single or couple picks which set of tax bands applies. Couple bands are wider.
- Marking somebody not resident replaces the bands, the allowances and the credits with one flat rate on the whole of their pay.
- Incapacitated, and a remote area posting, widen the tax-free band. The remote allowance is scaled by the days entered against the days in the year.
- Declared insurance premiums come off taxable pay, each held to its own yearly cap.
- Tax already deducted by a previous employer is taken into account before this month's is worked out.
Whether the employee is a woman comes from the gender on their staff record, not from this screen. The woman credit also needs only-employment-income ticked.
Tax is only worked out when a pay policy is in use
None of this has any effect until at least one Compensation Policy is active for your organization. Without one, no tax line reaches any slip at all, and everything on this screen sits unused.
If you expect tax on payslips and there is none, look there first, not here.
Tips and common mistakes
- Keep one record per employee per year. A new fiscal year needs a new record; last year's is not carried forward.
- Enter the previous employer's figures for anybody who joined part way through the year, or their tax for the rest of the year will be too low.
- Get the filing status right before the first run of the year. If you correct it later, the months already paid were still deducted on the wrong bands.
Related guides
- Tax Policy Year: the year's bands, caps and rebates
- Tax Heading: how each kind of pay is treated
- Employee: where the gender used by the woman credit is held
- Salary Slip: where the tax line appears