Introduction

Use Taxation override transactions to adjust tax only when the adjustment applies to all transactions in the pay.

Note: We recommend that you set any specific types of taxation override at allowance level.

Fields

Extra emolument:

• No

  Default value. Disables the Extra Emolument Details fields.

• Yes

  Enables the Extra Emolument Details fields and flags this transaction as an extra emolument transaction for reporting.

Override amount:

The value that you enter in this field depends on the Override type value.

Override type:

• %

  Used for employees who must pay a specific percentage of tax.

• Fixed

  Used to specify the exact amount of tax the employee pays. Use Fixed when you are reversing a pay.

  Note: Social Responsibility Tax (SRT) on Override type = "%" or "Fixed" is calculated by grossing up the sum of the employee's previous month's pays.

• Period

  Used when a non-redundancy, lump sum payment is equivalent to a number of standard pays. For example, an employee is paid for three weeks' annual leave and they are paid weekly so the payment is equal to three weekly pays. Recommended for back pays.

• +

  Taxes the employee normally and then adds the Override amount value.

• -

  Taxes the employee normally and then subtracts the Override amount value.

• Xtra Emolument Calc

  Use for lump sum payments that are classed as extra emolument payments. If Extra emolument  = "Yes" and Override type = "Xtra Emolument Calc", then the Elects to tax at higher rate and Grossed up annual amount fields are enabled.

• 1 +%

  Adds a percentage of the gross (defined in the Override amount field) to the tax deducted.

• 2 -%

  Subtracts a percentage of the gross (defined in the Override amount field) from the tax deducted.

Multiply Fixed Transactions:

Enabled when Override Type = "Period".

• Yes

  Select "Yes" if the employee has fixed-type allowances or deductions that usually occur every pay period. PayGlobal will multiply these transactions by the Override amount.

  When you add a Taxation Override transaction and set Multiple Fixed Transactions to "Yes", pay processing applies the Override amount to all fixed value allowances and deductions, including those created by payroll rules.

  Note: You must follow best practice ranking recommendations when you set up payroll rules.
  - Superannuation allowance payroll rules: Rank = Z or ZE
  - Other allowance payroll rules: Rank = A or G.
  - Deductions payroll rules: Rank = P or S.

• No

  Select "No" if the employee has fixed-type allowances or deductions that you do not want to use every pay period, such as meal allowances.

Override type and Override amount

The following table explains the relationship between the Override type and Override amount values.

Extra Emolument Details

Extra emolument payments are lump sum payments that are paid annually or as special bonuses. For example, bonuses, commissions, retirement or redundancy payments, gratuities, backpays, restrictive covenant or exit inducement payments, lump sum payments on termination and return-to-work payments.

Important: Lump sums that are paid regularly or for overtime are not extra emolument payments

Redundancy or retirement:

Enabled when Extra emolument = "Yes". This field must be "No" because "Yes" could create incorrect values in PGPRTAXA084.

Elects to tax at higher rate:

Not used in Fijian databases.

Calculate grossed up amount:

Enabled when Extra emolument  = "Yes" and Override type = "Xtra Emolument Calc". This Yes/No field determines whether PayGlobal calculates the employee's grossed up amount when you click the Grossed up annual amount pick list button or tab through the Grossed up annual amount field.

Note: Do not use in allowances with Type = "T. Tax Override" because it will not affect how tax is calculated.

Grossed up annual amount:

Enabled when Extra emolument = "Yes" and Override type = "Xtra Emolument Calc".

• If Calculate grossed up amount = "Yes", when you click the Grossed up annual amount pick list button or tab through this field PayGlobal:
  • Multiplies the employee's pay for the previous month by 13 to gross up the pay to a full year.
  • Adds any allowances, such as bonus or retirement allowances in the current pay.
  • Prints the results in an audit log.

    Note: PayGlobal requires at least 4 historical pays to correctly calculate the grossed up annual amount.

  Add the employee's extra emolument amount to their grossed up annual amount. If the total places the employee in the income range for a higher extra emolument tax rate, then tax the employee at the higher rate so they do not have a large tax bill at the end of the tax year.

• If Calculate grossed up amount = "No", then PayGlobal does not calculate this amount.

  Note: Although PayGlobal will calculate a Grossed up annual amount for allowances with Type = "T. Tax Override", it will not use it.

PayGlobal uses only payments made in the last 28 days to calculate the annual gross up. All extra emoluments in previous periods are excluded from the annual gross up.

When you process the pay, extra emolument amounts in the current period are added to the annual income derived from the last four weeks to determine the correct tax rate. If the employee has a secondary tax codes, the lower threshold of the tax code band is also added on to determine the correct tax rate.

Tax codes with a flat tax rate apply this flat rate to extra emoluments and they do not use the grossed up annual income to determine the tax rate.

Lower rate flagged:

Not used in Fijian databases.