Income Tax Calculation

General support regarding TimeTrex, such as
configuring policies/taxes or processing payroll.
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jairo
Posts: 25
Joined: Thu Dec 05, 2013 5:44 pm
Location: Dominican Republic

Income Tax Calculation

Post by jairo »

Hello All

I need help to create a income tax calculation for Dominican Republic,
For example an employee with a monthly wage, greater than RD$30,000 (pesos) applies to this calculation.

I am going to take a formal example.
Wage = 37,500 (Monthly)
Deduction (AFP & SFS) = 5.73%
Wage - Deduction = 35,351.25

Taxable amount is = 35,351.25

In DR the tax table is the following:
from 0 to 349,326.00 (exempt)
from 349,326.01 to 523,988.00 = 15% from the surplus of 349,326.01
from 523,988.01 to 727,761.00 = 26,199.00 + 20% from the surplus of 523,988.01
from 727.761.01 and hereafter = 66,954.00 + 25% from the surplus of 727,761.01

To know the surplus I just have to do the calculation :
Surplus / 12 - taxable_amount (Divide by 12 months)
349,326.01 / 12 = 29,110.50
The previous taxable amount
(35,351.25 - 29,110.50) = 6,240.75


So with this data I know that the tax that I need to pay is 15% based on calculation ranges from above.
Total Income tax is = 6,240.75 * 15% = $RD936.11.

How can I achieve this into timetrex?.

Thank you in advance and sorry for the extensibility of my post. :wink:
jairo
Posts: 25
Joined: Thu Dec 05, 2013 5:44 pm
Location: Dominican Republic

Re: Income Tax Calculation

Post by jairo »

I forgot to mention that I am using TT Community Edition 7.1.3, Linux Debian 7, PostgreSql, PHP 5.3, Automated installer.
Thank you.
shanec
Posts: 417
Joined: Thu Apr 25, 2013 8:22 am

Re: Income Tax Calculation

Post by shanec »

You can use the Advanced Percent (Tax Bracket Alt.) tax. To set that up click Payroll -> Taxes/Deductions icon -> New icon, and then from the Type drop-down box choose ADVANCED PERCENT (TAX BRACKET ALT.), enter in your data and then Save the tax. Create one for each of your three brackets.

Be sure to check INCLUDE PAY STUB ACCOUNTS and EXCLUDE PAY STUB ACCOUNTS as well as make all PAY STUB ACCOUNTS the same for all brackets.

For more information please see the Taxes/Deductions section of the TimeTrex Administrator Guide:
http://help.timetrex.com/index.php/Time ... Deductions
jairo
Posts: 25
Joined: Thu Dec 05, 2013 5:44 pm
Location: Dominican Republic

Re: Income Tax Calculation

Post by jairo »

Thanks Shanec.

I will be making some tests with this.
Any other progress will be notified.
jairo
Posts: 25
Joined: Thu Dec 05, 2013 5:44 pm
Location: Dominican Republic

Re: Income Tax Calculation

Post by jairo »

Hello Shanec / All

I have set up the Tax calculation as you told me.
But I doesn't show in the paystub (I have recalculated the timesheet)

The part where I am very lost is choosing the include and exclude paystub accounts.
The thing is that the tax is aplicable to net pay, this is after other deductions were calculated.

Attached a screenshoot of what I have.

Sorry for my bad english.

Thank you.
Attachments
ISR1.png
shanec
Posts: 417
Joined: Thu Apr 25, 2013 8:22 am

Re: Income Tax Calculation

Post by shanec »

The Include Pay Stub Accounts is the section where you define what Pay Stub accounts are to be taxed. The Exclude Pay Stub Accounts is the section where the selected Pay Stub Accounts are subtracted from the Include Pay Stub Accounts.

For more information please see the Taxes/Deductions section of the TimeTrex Administrator Guide:
http://help.timetrex.com/index.php/Time ... Deductions
jairo
Posts: 25
Joined: Thu Dec 05, 2013 5:44 pm
Location: Dominican Republic

Re: Income Tax Calculation

Post by jairo »

Hi Shanec / All

I have created an employee (Jairo Severino) on the demo site, and also I made the initial configuration following your explaination.
But I can't get this to work properly, I filled all the information to reproduce the example that I made in the first post.

The tax is not being processed and not showing in the paystub.
I have made the timesheet recalculation.

The 3 brackets name are ISR1, ISR2 and ISR3.
Deductions name' SFS and AFP, each have their own paystub accounts.

Can you check it out please and tell me what I am doing wrong.
Thanks in advance.

http://demo.timetrex.com/interface/flex ... sword=demo
jairo
Posts: 25
Joined: Thu Dec 05, 2013 5:44 pm
Location: Dominican Republic

Re: Income Tax Calculation

Post by jairo »

Thank you Shanec.

I have everything working properly.

Thank you.

Jairo
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