Salary Calculation in Payroll Preparation
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The most suitable and easiest method for calculating salaries for small businesses is available directly in Payroll Preparation form. Just enter net, gross1 or gross2 amounts and all other amounts are calculated automatically.
This way you can also calculate bonus and compensation amounts.
Let us assume that you select this method of salary calculation having made arrangments with the employees for net or gross payments.
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1. Abdula Abi – A 1000 EUR Net Payment Arrangement
a) Modify the formula for calculating regular pay or create a new earnings type where the formula used in calculation references the amount used in payroll preparation.
b) Select earnings type (in our case: RD6). Enter working hours even though this information is not required for formula.
c) Click 
.
Proceed by entering the agreed net amount. Employee's tax relief (in Relief panel in Employee Files) is displayed in report. Here are in addition displayed employee and employer contributions which are otherwise entered in the Municipalities register.
All missing information are calculated automatically after shifting to the next line using TAB key. The percentage value of income tax calculated from net amount is also displayed. As of 1 January, 2009 it is not required to account for payroll tax. That is why the value in the corresponding field is always 0.
f) Clicking 
, displays gross salary amount.
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If there are any bonuses peraining to this type of work or any credit installments pending, the net payment amount can vary from the entered net amount.
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According to the Earnings Types settings here belong also length of service bonus, plus, the employee pays credit installments and self-imposed contributions.
2. Abdula Abi – A 650 EUR GROSS Payment Arrangement
a) Set RD6 for earnings type linked to the amount in payroll preparation form (see previous example).
b) Select earnings type (in our case: RD6). Enter working hours even though this information is not required for formula.
c) Click 
.
Proceed by entering the agreed gross amount. Employee's tax relief (in Relief panel in Employee Files) is displayed in report. Here are in addition displayed employee and employer contributions which are otherwise entered in the Municipalities register.
e) All missing information are calculated automatically after shifting to the next line using TAB.
The percentage value of income tax calculated from net amount is also displayed. As of 1 January, 2009 it is not required to account for payroll tax. That is why the value in the corresponding field is always 0.
f) Clicking 
, displays gross salary amount.
According to the Earnings Types settings here belong also length of service bonus. The employee does not pay any credit installments or self-imposed contributions.
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Follow the same procedure to calculate gross2 salary amount. |
3. Abdula Abi – Include Length of Service Bonus
Set length of service bonus (in our case S - Total) in Earnings Types for the set earnings type (in our case RD6). If you do not account for the length of service bonus, you can leave Include Length of Service Bonus unchecked.
Should you have to account for the length of service bonuse, do the following:
a) Check Include Length of Service Bonus to include it in the gross payment amount.
In this case the gross amount of 2,000.00 EUR includes the length of service bonus amount. That is why the amount is reduced by the length of service bonus amount after clicking 
and running 
calculation. It is 1,904,76 EUR.
b) On the other hand, leaving the checkbox unchecked, adds the amount to the gross salary.
Hence the length of service bonus amount is added to 2,000.00 EUR after clicking 
and running 
calculation. The amount entered in form remains unchanged, that is, 2,000.00 EUR. The gross amount is increased and is 2,010.00 as can be observed on pay slip.
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