In Netvisor, each salary model must include all calculatory salary types to enable payroll. Calculatory salary types affect, among other things, the calculation of withholding tax.
The mandatory standard salary types for all salary models in terms of Netvisor's functionality are:
CONTENT
The mentioned salary types belong to the "Calculatory" group in the formulas of salary models. When creating new salary types, the salary type must be linked to one of these calculatory salary types in the salary model-specific formulas, or a calculation formula must be defined for the new salary type. The calculatory salary type to which the new salary type is linked depends on the nature of the salary type. The salary type to which the created salary type is linked depends, for example, on whether it is subject to withholding tax or a tax-exempt allowance for expenses.
Calculatory salary types and the salary types linked to them can be found in the salary model-specific formulas: Payroll > Payroll calculation > Salary model management > click "Formulas" next to the desired salary type.
Calculatory salary types are always listed first in the salary model's salary type formulas. All other salary types of the salary model are linked to these.
If a salary item that falls under Salary in money (subject to withholding tax) is not linked to the Salary in money calculation formula, but instead to the To be paid salary type calculation formula, withholding tax will not be deducted from that salary item, nor will the salary item be considered in Gross pay. This distorts payroll reporting and causes incorrect payroll calculation.
It should also be noted that neither Salary in money nor other calculatory salary types should be used in payroll calculation; instead, create your own salary types for payroll calculation or use existing salary types.
The idea of calculatory salary types is that salary types are linked to them according to the nature of the salary types. The nature of a salary type can be fringe benefits, tax-exempt allowance for expenses, or deduction. Whether withholding tax or other deductions are levied on the salary determines to which calculatory salary type formula the salary type should be linked.
Gross pay
Salary in money and all fringe benefits are linked to Gross pay. Withholding tax is calculated from Gross pay.
Withholding tax
In withholding tax, the amount of withholding tax is calculated from Gross pay according to the tax percentages on the tax card.
To be paid
The final wages paid, from which all deductions have been made, remain as the amount to be paid. These have been added to the To be paid formula.
The To be paid formula also includes all tax-exempt allowances for expenses such as daily allowances and kilometre allowances.
Salary in money
All salaries subject to withholding tax that are paid to the employee are linked to Salary in money.
Salary in money is used in Gross pay and Net wage or salary so that withholding tax and other deductions can be calculated from the salary types linked to Salary in money. In Net wage or salary, all deductions are subtracted from Salary in money.
Net wage or salary
Net wage or salary subtracts withholding tax and other statutory deductions such as employment pension contribution and unemployment insurance contribution from Salary in money.
Net wage or salary is also used to calculate distraint.
Example
The operation of calculatory salary types is illustrated by the following payslip example.
Employee's salary information:
Monthly salary: 2500 €
Mobile phone benefit: 20 €
Withholding tax: 20 %
Employment pension contribution: 6.75 %
Unemployment insurance contribution: 1.5 %
Kilometre allowance: 100 km
Distraint: 250 €
The calculation formulas for the calculatory salary types in the payslip are formed as follows:
Salary in money: Monthly salary 2500 €
Gross pay: Salary in money + Mobile phone benefit (2500 € + 20 €)
Withholding tax: Gross pay x tax card withholding percentage (2520 € x 20 %)
Net wage or salary: Salary in money - Withholding tax - Employment pension contribution - Unemployment insurance contribution (2500 € - 504 € - 170.10 € - 37.8 €)
To be paid: Net wage or salary + Kilometre allowance - Distraint (1788.10 € + 42 € - 250 €)
When creating a new salary type, it is necessary to know the nature of the salary type, i.e., whether it is subject to withholding tax, a fringe benefit, or a tax-exempt allowance for expenses. Based on this, the salary type can be linked to the correct calculatory salary type. Calculatory salary types have an impact on other automatic settings and reporting in Netvisor.
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