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.

• → 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 Emoluments for the month, for example: Salary
• → 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 benefit

• → Manually calculate the emoluments and chargeable income (exclusive of tax benefit)

Excel illustration

• → Verify the tax (PAYE and FSC) exclusive of tax benefit

Excel illustration Tax PAYE calculation (exclusive of tax benefit)

PAYE Calculation Checklist illustration Step 3

Excel illustration Tax FSC calculation (exclusive of tax benefit)

PAYE Calculation Checklist illustration Step 4

Excel illustration Total Tax (PAYE and FSC) exclusive of 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

Excel illustration Tax charged on PAYE benefit

PAYE Calculation Checklist illustration Step 5

Excel illustration Tax charged on FSC benefit

PAYE Calculation Checklist illustration Step 6

Excel illustration Total Tax (PAYE and FSC) benefit

PAYE Calculation Checklist Step 7

• → Add the Tax Benefit (PAYE and FSC) to the emoluments for the purpose of calculating the chargeable income (inclusive of Tax benefit)

Excel illustration

PAYE Calculation Checklist illustration Step 11

• → 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 benefit

PAYE Calculation Checklist illustration Step 12

Excel illustration Tax (FSC) inclusive of tax benefit

PAYE Calculation Checklist illustration Step 13

• → Verify the Total tax withheld in previous months and
• → Verify the Tax to be withheld in the month

Excel illustration

PAYE Calculation Checklist Step 14 and 15