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spay:hrmsprocguide:fair_share_contribution_with_tax_on_tax [2026/02/19 11:20] 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 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. | + | * 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. |
| - | __** Verification of Tax benefits** __ | + | __** Verification of Tax benefit** __ |
| - | * __**Manually calculate the emoluments and chargeable income (exclusive of tax benefits) **__ | + | * → **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|}} | ||
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| {{:spay:hrmsprocguide:step_13.png|}} | {{:spay:hrmsprocguide:step_13.png|}} | ||
| - | * → **Verify the Total tax withheld in previous months and the tax to be withheld in the month** | + | * → **Verify the Total tax withheld in previous months and ** |
| + | * → **Verify the Tax to be withheld in the month** | ||
| Excel illustration | Excel illustration | ||