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spay:hrmsprocguide:fair_share_contribution_with_tax_on_tax [2026/02/18 16:34] mclement |
spay:hrmsprocguide:fair_share_contribution_with_tax_on_tax [2026/02/19 11:40] (current) mclement |
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| - | ============Fair Share Contribution with Tax on Tax=============== | + | ============Fair Share Contribution with Tax Benefit=============== |
| - | *Below is a PAYE Calculation Checklist including the Fair Share Contribution where the Tax Benefit is applicable. Please refer to the respective Illustrations, which help to verify the breakdown of the PAYE Calculation Checklist. | + | * Below is a PAYE Calculation Checklist including the Fair Share Contribution where the Tax Benefit applies. |
| + | * Please refer to the respective Illustrations, which provide a detailed breakdown of the calculation. | ||
| + | * The illustration steps indicate the order in which the calculations and figures should be verified. | ||
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| * → Check the **Pay Period**: In this example, the PAYE Calculation Checklist is for the month of **February 2026** | * → Check the **Pay Period**: In this example, the PAYE Calculation Checklist is for the month of **February 2026** | ||
| * → Check the section **“Your PAYE Particulars”** : In this example, the employee **has submitted an EDF in August 2025** and **enjoys a tax benefit (when his tax liability is borne by his employer). This tax benefit is treated as a fringe benefit** | * → Check the section **“Your PAYE Particulars”** : In this example, the employee **has submitted an EDF in August 2025** and **enjoys a tax benefit (when his tax liability is borne by his employer). This tax benefit is treated as a fringe benefit** | ||
| - | * Step 1: Check the **Emoluments for the month**, for example: Salary | + | * → Check the **Emoluments for the month**, for example: Salary |
| - | * Step 2: Check the **Total emoluments paid in previous months** , which in this example, it refers to the emoluments from August 2025 to January 2026, since the PAYE Calculation Checklist is for the month of February 2026. | + | * → Check the **Total emoluments paid in previous months** , which in this example, it refers to the emoluments from August 2025 to January 2026, since the PAYE Calculation Checklist is for the month of February 2026. |
| - | * __**Manually calculate the emoluments and chargeable income (exclusive of tax benefits) for the purpose of verifying the PAYE and FSC (both exclusive of tax benefits) **__ | + | __** Verification of Tax benefit** __ |
| + | * → **Manually calculate the emoluments and chargeable income (exclusive of tax benefit) ** | ||
| Excel illustration | Excel illustration | ||
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| {{:spay:hrmsprocguide:step1_calculate_chargeable_income_wo_tax_benefit_.png|}} | {{:spay:hrmsprocguide:step1_calculate_chargeable_income_wo_tax_benefit_.png|}} | ||
| - | * __**Verify the tax (PAYE and FSC) exclusive of tax benefits**__ | + | * → **Verify the tax (PAYE and FSC) exclusive of tax benefit** |
| - | Excel illustration Tax PAYE calculation (exclusive of tax benefits) | + | Excel illustration Tax PAYE calculation (exclusive of tax benefit) |
| {{:spay:hrmsprocguide:step_2_calculate_tax_paye_at_progressive_scale.png|}} | {{:spay:hrmsprocguide:step_2_calculate_tax_paye_at_progressive_scale.png|}} | ||
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| {{:spay:hrmsprocguide:step3.png|}} | {{:spay:hrmsprocguide:step3.png|}} | ||
| - | Excel illustration Tax FSC calculation (exclusive of tax benefits) | + | Excel illustration Tax FSC calculation (exclusive of tax benefit) |
| {{:spay:hrmsprocguide:step_3_calculate_tax_15_fair_share_contribution.png|}} | {{:spay:hrmsprocguide:step_3_calculate_tax_15_fair_share_contribution.png|}} | ||
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| {{:spay:hrmsprocguide:step4.png|}} | {{:spay:hrmsprocguide:step4.png|}} | ||
| - | Excel illustration Total Tax (PAYE and FSC) exclusive of tax benefits | + | Excel illustration Total Tax (PAYE and FSC) exclusive of tax benefit |
| {{:spay:hrmsprocguide:step_4_total_tax_payable_on_the_emoluments_exclusive_of_tax_benefits_.png|}} | {{:spay:hrmsprocguide:step_4_total_tax_payable_on_the_emoluments_exclusive_of_tax_benefits_.png|}} | ||
| - | * → __**Use the Total Tax charged exclusive of tax benefits to verify the additional tax (PAYE and FSC) payable on the tax benefit**:__ | + | * → **Use the Total Tax charged (exclusive of tax benefit) to verify the additional tax (PAYE and FSC) payable on the tax benefit**: |
| - | * ** That additional tax payable, tax borne by the employer, becomes itself a tax benefit on which the additional tax payable is calculated again. The process is repeated until the additional tax payable is near zero** | + | * → ** That additional tax payable, tax borne by the employer, becomes itself a tax benefit on which the additional tax payable is calculated again. The process is repeated until the additional tax payable is near zero** |
| Excel illustration Tax charged on PAYE benefit | Excel illustration Tax charged on PAYE benefit | ||
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| {{:spay:hrmsprocguide:step7.png|}} | {{:spay:hrmsprocguide:step7.png|}} | ||
| - | * → __**Add the Tax Benefit (PAYE and FSC) to the emoluments for the purpose of calculating the chargeable income (inclusive of Tax benefit)**__ | + | * → **Add the Tax Benefit (PAYE and FSC) to the emoluments for the purpose of calculating the chargeable income (inclusive of Tax benefit)** |
| Excel illustration | Excel illustration | ||
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| {{:spay:hrmsprocguide:chargeable_income_inclusive_of_tax_benefit.png|}} | {{:spay:hrmsprocguide:chargeable_income_inclusive_of_tax_benefit.png|}} | ||
| - | * → **Use the chargeable income (inclusive of tax benefits) to verify the tax (PAYE and FSC) inclusive of tax benefits** | + | * → **Use the chargeable income (inclusive of tax benefit) to verify the tax (PAYE and FSC) inclusive of tax benefit** |
| - | Excel illustration Tax (PAYE) inclusive of tax benefits | + | Excel illustration Tax (PAYE) inclusive of tax benefit |
| {{:spay:hrmsprocguide:step_9_based_on_the_new_chargeable_income_calculate_tax_paye_at_progressive_scale.png|}} | {{:spay:hrmsprocguide:step_9_based_on_the_new_chargeable_income_calculate_tax_paye_at_progressive_scale.png|}} | ||
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| {{:spay:hrmsprocguide:step_12.png|}} | {{:spay:hrmsprocguide:step_12.png|}} | ||
| - | Excel illustration Tax (FSC) inclusive of tax benefits | + | Excel illustration Tax (FSC) inclusive of tax benefit |
| {{:spay:hrmsprocguide:step_10_based_on_the_new_chargeable_income_calculate_tax_15_fair_share_contribution.png|}} | {{:spay:hrmsprocguide:step_10_based_on_the_new_chargeable_income_calculate_tax_15_fair_share_contribution.png|}} | ||
| Line 94: | Line 97: | ||
| {{:spay:hrmsprocguide:step_13.png|}} | {{:spay:hrmsprocguide:step_13.png|}} | ||
| - | * → **Verify the Total tax withheld in previous months** | + | * → **Verify the Total tax withheld in previous months and ** |
| + | * → **Verify the Tax to be withheld in the month** | ||
| Excel illustration | Excel illustration | ||
| - | {{:spay:hrmsprocguide:steps_11_and_12.png|}} | + | {{:spay:hrmsprocguide:steps_14_and_15.png|}} |
| - | PAYE Calculation Checklist Step 14 | + | PAYE Calculation Checklist Step 14 and 15 |
| {{:spay:hrmsprocguide:step_14.png|}} | {{:spay:hrmsprocguide:step_14.png|}} | ||
| - | * → **Verify the tax to be withheld in the month** | ||
| - | PAYE Calculation Checklist illustration Step 15 | ||
| - | {{:spay:hrmsprocguide:tax_benefit_steps_11_and_12.png|}} | ||