Summary: This help describes how to handle the payment of work compensation when the receiving company is not part of the prepayment register. The help guides you through establishing the company as an employee, creating the necessary salary types, creating the payslip, and handling accounts payable. The income register provides guidelines for reporting work compensation.
Establishing a company as an employee
Establish the company in the program as an employee by selecting Salaries > Personnel > New employee.
Select "Company" from the dropdown menu as the employee type.
Fill in the other details. Only companies with a Finnish business id can be established in Netvisor.
Set the basis of employment to "Other basis".
If the payments received by the employee are not subject to social security contributions, select "Not subject to employer's health insurance contribution".
For "Chargeable services", switch on the Salaries service. Otherwise, a payslip cannot be created for the company in the payroll process. Activating the Salaries service creates a billing basis. Detailed instructions for pricing can be found here: Billing basis for the Salaries and travel service.
Add the tax card details to the employment information on the "Tax cards" tab by selecting Salaries > Personnel > Employee listing > click on the employee's name > Tax cards > New tax card.
New salary type for the VAT-inclusive amount of work compensation
Create new salary types in the salary model formulas so that the necessary rows are displayed on the payslip.
First, define the new salary types. Check the income register's instructions for reporting work compensation, i.e., which salary type should have income type allocating and with what information the earning payment report is sent to the income register. Add the income type allocating from the salary type settings. Also, add bookkeeping accounts to the salary types as needed according to your company's bookkeeping practices.
The necessary salary types are:
VAT-inclusive amount of work compensation
VAT-exclusive amount of work compensation
VAT portion included in work compensation
Create new salary types by selecting Salaries > Payroll > Salary model management > Company-specific salary types > Add new salary type.
Add "Salaries and allowances" as the group for the salary type, "Not considered" as the payroll list group, and "User's formula" as the source.
After saving, add the created salary type to the formula of the "Salary in money" salary type in the used salary model by selecting Salaries > Payroll > Salary model management > click "Formulas" next to the desired salary model > from the pencil/notepad icon next to the "Salary in money" salary type.
Make the addition to the formula from the green plus as shown in the image below. Select the first row operation: plus sign. Select the second row salary type: VAT-inclusive amount of work compensation. Save.
After this, the created salary type appears in the list of formulas for the salary model to which it was just linked.
New salary type for the VAT portion
Create a new salary type named "VAT portion included in work compensation".
Fill in at least the following details for the salary type:
Add the salary type to the "To be paid" salary type formula by selecting Salaries > Payroll > Salary model management > from the correct salary model "Formulas" > "To be paid" salary type row pencil/notepad icon.
Add the newly created salary type to the formula as shown in the image below. Select the first row operation: plus sign. Select the second row salary type: VAT portion included in work compensation. Save.
The salary type should also be subtracted from the "Salary in money" salary type formula. Add the first row operation: minus sign. Select the second row salary type: VAT portion included in work compensation.
New salary type for the VAT-exclusive amount of work compensation
For the VAT-exclusive amount, create a new salary type from company-specific salary types and set the necessary settings for this salary type. Select "User's formula" as the source.
Link the salary type to the salary model by selecting Salaries > Payroll > Salary model management > Select the used salary model > Formulas > Salary type formulas tab > Link salary type to salary model: VAT-exclusive amount of work compensation > Link.
The salary type should be manually given a formula. Add rows from the green plus. The first row should be salary type: VAT-inclusive amount of work compensation. The second row should be operation: minus sign. The third row should be salary type: VAT portion included in work compensation.
Creating a payslip
Create a payslip by selecting Salaries > Payroll > Payslips and periods > click on the desired pay period dates from the salary model to which the company receiving work compensation is linked.
Create the payslip normally up to the "unprocessed payslips" stage.
Select "edit" and "add new salary type row".
Choose "VAT-inclusive amount of work compensation" from the dropdown menu and select "add".
Enter the amount for the salary type and save.
Add another new salary type row to add the VAT portion to the calculation.
Example calculation:
The example deals with an invoice related to a case, with a total amount of 500 euros. This amount includes VAT of 96.78 euros.
Withholding (on) is deducted from the VAT-exclusive amount of the case, i.e., 500 e - 96.78 e = 403.22 euros, according to the tax card information. In the example, the withholding (on) is 4%, so the amount of withholding (on) is 403.22 e * 0.04 = 16.13 e.
The company is paid the remaining portion of the VAT-exclusive amount after withholding (on), i.e., 403.22 e - 16.13 e = 387.09 e.
In addition, the VAT portion of 96.78 e is to be paid. The total "To be paid" amount is thus 387.09 e + 96.78 e = 483.87 e.
In the payroll process, you can preview the information of the earning payment report to be sent to the income register. Check the income type allocations and other necessary information according to the income register's instructions.
Proceed with the payslip in the payroll process.
At the "unpaid payslips" stage, select the function "mark as paid". Send or skip sending the earning payment report to the income register.
Create a bookkeeping voucher. Check that the voucher details are correct. Edit them manually if necessary.
Make a separate bank transfer to the invoicing company for their share. Remit the withholding (on) to the tax authorities. The payslip serves as a voucher for the compensation recipient.
Handling accounts payable
In accounts payable, the invoice can be rejected and a comment added to the invoice explaining its handling in payroll.
Frequently asked questions
How do I establish a company as an employee in the program?
Establish the company by selecting Salaries > Personnel > New employee and select "Company" as the type from the dropdown menu. Note that the company must have a Finnish business id.
Which salary types do I need to create for reporting work compensation?
Create three new salary types in the salary model formulas: VAT-inclusive amount of work compensation, VAT-exclusive amount of work compensation, and VAT portion included in work compensation.
How do I add the created salary types to the payslip?
Create the payslip up to the "unprocessed payslips" stage, select "edit" and then "add new salary type row". Select the desired salary type and enter the amount.
How do I handle an invoice related to work compensation in accounts payable?
In accounts payable, the invoice can be rejected and a comment added to the invoice explaining its handling in payroll.
Keywords: work compensation, company as an employee, prepayment register, income register, salary type, value added tax, VAT, payslip, accounts payable.
This article has been translated using an AI-based translation tool. The contents or wording of these instructions may differ from those in other instructions or in the software.