The tax rules for one fiscal year and one filing status: the tax bands, the rebates and the deduction caps that payroll works to.
When to use it
Once a year, when the budget changes the rates. You need two records for each year, one for single and one for couple.
Before you start
The fiscal year must exist, and you need the year's published bands, caps and rebates to hand.
Where to find it
Open the HR area from the main menu, then HR Setup, then Tax Policy Year.
The fields on this screen
| Section | Field (on screen) | What to enter | Required |
|---|---|---|---|
| Policy Year | Fiscal Year | The fiscal year these tax rules cover. If a payroll run finds no row for its year, no tax is deducted. | No |
| Policy Year | Country | The country these rules are for. Payroll only looks for NP, so a row under any other code is never used. | No |
| Policy Year | Filing Status | Single or couple. Enter one row of each - an employee is taxed on the row matching their filing status. | No |
| Policy Year | Retirement Cap (NPR) | (not explained yet) | No |
| Policy Year | Retirement % of AI | (not explained yet) | No |
| Policy Year | SSF Emp % | (not explained yet) | No |
| Policy Year | SSF Emr % | (not explained yet) | No |
| Policy Year | EPF Emp % | (not explained yet) | No |
| Policy Year | EPF Emr % | (not explained yet) | No |
| Policy Year | Woman Rebate % | (not explained yet) | No |
| Policy Year | Woman Under Couple | Tick to let a woman filing as a couple still get the woman rebate. Left unticked, a couple election loses it. | No |
| Policy Year | Medical Cap | (not explained yet) | No |
| Policy Year | Medical % | (not explained yet) | No |
| Policy Year | Non-Resident % | Flat rate on a non-resident's whole pay, as a decimal - 0.25 is 25 percent. No bands or rebates apply. | No |
| Policy Year | Residency Days | (not explained yet) | No |
| Policy Year | Deposit Deadline (days) | (not explained yet) | No |
| Policy Year | Late Interest % | (not explained yet) | No |
| Policy Year | Late Filing % | (not explained yet) | No |
| Policy Year | Notes | (not explained yet) | No |
| Slabs | Band | Order of this band, starting at 1. The bands are walked in this order, so a gap or a repeat mis-taxes pay. | No |
| Slabs | Upper NPR | Income this band runs up to, counted from zero. Leave it blank on the top band to mean no limit. | No |
| Slabs | Rate | Rate charged on the slice of income inside this band, as a decimal - 0.01 is 1 percent. | No |
| Slabs | Rev Code | The revenue heading this band's tax is deposited under. Tax withheld is split by these codes. | No |
| Slabs | SST? | Tick the 1 percent social security band. It falls to zero for an employee the policy waives it for. | No |
| Rebates | Code | woman and medical_credit are handled by name. Any other code just gives its Amount, or Percent capped at Cap. | No |
| Rebates | Name | A readable name for this rebate. It does not affect the calculation. | No |
| Rebates | Type | pre_slab_uplift widens the tax bands before tax is worked out. post_slab_credit comes off the tax itself. | No |
| Rebates | Amount | A fixed amount for this rebate. On a remote area uplift it can be pro-rated by the days worked there. | No |
| Rebates | Percent | Used instead of Amount, as a decimal - 0.10 is 10 percent. The woman rebate takes this share of the tax. | No |
| Rebates | Cap | The most this rebate can give. The medical credit is the smaller of this and its percent of the bills. | No |
| Rebates | Section | The law this rebate comes from, such as Section 51. It is a reference note and changes no figure. | No |
| Deduction Caps | Bucket | Only life_insurance, health_insurance, building_insurance and retirement_combined are used. Any other code is ignored. | No |
| Deduction Caps | Name | A readable name for this cap, such as Life Insurance Premium. It does not affect the calculation. | No |
| Deduction Caps | Cap NPR | The most that can come off taxable pay for this bucket in a year. What the employee actually paid is capped at it. | No |
| Deduction Caps | Cap % | Used on the retirement row only: the cap is also held to this share of yearly pay, 0.3333 for one third. | No |
| Deduction Caps | Shared With | (not explained yet) | No |
How it works
Payroll looks for the record whose fiscal year contains the last day of the pay period, under the country code NP, matching that employee's filing status.
No matching record means no tax at all. The run does not stop and nothing is flagged; the slips come out with no tax line. Before the first run of a new year, check that both records exist, single and couple. Also check the country code says NP, because a record under any other code is never found.
The figures actually applied come from the three grids:
- Slabs give the bands: the order they are walked in, the income each runs up to, the rate on the slice inside it, and the revenue code the tax is deposited under. Leave the top band with no upper limit. A gap or a repeat in the order taxes people wrongly.
- Deduction Caps give the insurance and retirement caps that come off taxable pay. Only four bucket codes are recognised: life insurance, health insurance, building insurance and the combined retirement bucket. Any other code is ignored entirely.
- Rebates give the woman rebate and the medical credit, found by their codes. The percent and the cap that apply are the ones on those grid rows.
Most of the header is not applied
Only three things on the header itself have any effect. The first is the fiscal year, country and filing status that identify the record. The second is the tick that lets a woman filing as a couple keep her rebate. The third is the flat rate charged on a non-resident.
The rest change nothing at all. The retirement caps, the fund contribution percentages, the woman rebate percent, the medical credit cap and percent, the residency day count, the deposit deadline and the penalty percentages are either read from somewhere else or not read at all. Filling them in does not make a cap apply or a rebate pay.
If a cap or a rebate has to apply, it must be a row in the Deduction Caps or Rebates grid. Treat the header figures as a written note of the year's rules, and check the grids against the slips on the first run.
Tips and common mistakes
- Copy last year's records and edit them instead of starting from nothing. The grids are where the work is.
- Rates and percentages go in as decimals. One percent is 0.01, ten percent is 0.10.
- Tick the social security band on the slab it belongs to. That is the band that falls away for an employee the rules waive it for.
- None of this is used until a Compensation Policy is active for your organization. Without one, no tax is worked out at all.
Related guides
- Tax Employee Config, each employee's own circumstances for the year
- Tax Heading, how each kind of pay is treated before the bands
- Salary Slip, where the tax line appears