This Manual explains the Tax set-up process on HumanManager. Note: All amounts referenced for purpose of freepay, tax law and taxable income algorithm were assumed and do not represent the actual figures in your environment.

 Five steps to be covered are:

· Understanding the Tax Flow

· Defining your Taxable Income

· Setting up Freepay

· Tax Law Definition

· Putting it all together

Assumptions:

· Staffs have been setup in HumanManager

· All Staff are in paygroups (Salary Groups)

· Staff payroll elements (Basic & Allowances) have been defined for each staff

1. Tax Elements:

The following would need to be considered when determining tax to be paid for a specific period.

a) Earnings subject to tax (Gross Taxable Income)

b) Freepay/Relief items

c) Net Taxable Items

d) A Tax Law/Graduated tax table

1.1 The Tax Flow

· (a)Gross Taxable Income – (b)Freepay = (c)Net Taxable

· Net Taxable (Subjected to (d)Tax law) = Tax due

Figure 1 (Tax calculation on HumanManager)

2.  Defining your Taxable Income

HumanManager allows the flexibility of defining what payroll elements contribute to your total taxable earning (Gross taxable). The “Define Taxable Income Algorithm” is a set of computation formula for arriving at the gross taxable income of an employee’s salary.

Navigation: (Foundation – System Administration – Setup – Payroll – ‘Define Taxable Income Algorithm’)

Figure 2 (Define Taxable Income Algorithm)

Figure 3 (Tax Income Algorithm Definition)

Note: To add a new entry to the tax table choose an operator

3. Freepay Setup

3.1 Allowance Based

Allowances entitled to relief can be setup to reflect these provisions at their definition. In the example below the allowance can be setup to enjoy a relief of 30,000 (Thirty thousand) by picking either of the following against the amount.

· Higher amount (Tax 30,000)

· Higher Non Taxable Amount (Tax amounts above 30,000)

3.2 Calculation Table

The Calculation Table is used to generate variable figures for employees using the same parameters. Calculation operands can range from numeric figures, to components of allowances, deductions and loans, to number of children and other calculations. This can be used to compute your freepay.

Navigation: (Foundation – System Administration – Setup – Payroll – ‘Define Calculation Table’)

4.  Tax Law

HumanManager helps you define your tax laws. Included on the screen is the tax table to help you capture your tax details.

Navigation: (Foundation – System Administration – Setup – Payroll – ‘Define Tax Law’)

Figure 5 (Define Tax Law)

Click on the Update button to save entries.

5. Putting it all together

After completing the definitions for Taxable Allowances, Freepay (Calculation Table) and Tax Law, update the staff paygroup to reflect these settings.

(Foundation – System Administration – Setup – Payroll – ‘Define Paygroup’)

Navigate to the staff paygroups and update where relevant. Click on “Update” for each item when done. Select the top “Cancel” button to navigate back to the define paygroup screen. Click on the “Submit” button to save changes.

Figure 6 (Insert Taxable Income to Paygroup)

Figure 7 (Insert freepay to paygroup)

Figure 8 (Insert Tax Law to paygroup)

 *Remember to run draft before confirming results