Monthly Wage

Use this forum to discuss desired new features for TimeTrex
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lsanchez_gutierrez
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Joined: Fri Jan 05, 2007 5:26 pm
Location: San Jose, Costa Rica
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Monthly Wage

Post by lsanchez_gutierrez »

I recently installed the 1.5 beta version and tried the "Advanced Percent (Tax Bracket)" option. the results were really good, but not exactly what I calculated, there is a 5% deviation. This could be because the tax brackets I use are monthly, and I have to multiply them by 12, this gives a certain margin of error. TimeTrex uses "Annual Wage Base/Exempt Amount".

TimeTrex allows employees to have "Hourly" and "Salary (Annual)" wages, in Latin American countries taxes and deductions are calculated on a monthly salary. Is it possible that you will add this feature in the next release? Comments? Suggestions?
shaunw
Posts: 7839
Joined: Tue Sep 19, 2006 2:22 pm

Post by shaunw »

Can you please post some hard numbers and examples of what TimeTrex is calculating and what you are calculating so we can try to replicate the issue. The difference between annual and monthly tax brackets, or even salary should not be 5%.
lsanchez_gutierrez
Posts: 36
Joined: Fri Jan 05, 2007 5:26 pm
Location: San Jose, Costa Rica
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Post by lsanchez_gutierrez »

Some background for this topic is: http://forums.timetrex.com/viewtopic.php?t=132

I was using TimeTrex "Advanced Percent" to calculate Tax Tiers but it did not work correctly. With the new 1.5 beta version "Advanced Percent (Tax Brackets)" they seem to work a lot better. Some of the numbers I'm using are the following:

An employee works 80 hours in a 15 day period with an hourly salary of $17.10 this gives a salary of $1,368 for this pay period. The Tax Tiers in Costa Rica (Yearly) are as follows:

Under $10,896 : No Tax
$10,896 - $16,344 : 10% Tax
Above $16,356 : 15% Tax

In Costa Rica the income tax is calculated on a monthly basis, that means those values would be:

Under $908 : No Tax
$908 - $1,362 : 10% Tax
Above $1,363 : 15% Tax

Those taxes are cumulative, this means that for our employee he has to pay taxes equivalent to each tax bracket because his monthly salary is in the 15% Tax bracket.

If you calculate his taxes with the yearly table it would be:
Yearly Salary: $1,368 * 2 = $2,736 (Monthly Salary) * 12 = $32,832

For his first $10,896 in earnings he doesn't pay taxes

For the 10% bracket he would pay all the taxes: $16,344 - $10,896 = $5,448 / 12 = $454 (Monthly) / 2 = $227 (15 Day period), from this we get the 10% = $22.7 in taxes

For the 15% bracket he would pay taxes for his earnings above $16,356: $32,832 - $16,356 = $16,476 / 12 = $1,373 (Monthly) / 2 = $686.5 (15 Day period), from this we get the 15% = $102.97 in taxes

The TimeTrex Pay Stub Summary, when you View Pay Stubs in PDF TimeTrex gives the following values for the income tax:

10% = $20.95
15% = $110.84

They are different from my calculations. I calculated the taxes with the yearly table and monthly, they give me the same results, which don't match TimeTrex. What do you recommend with those calculations?

PS. I think it would be usefull if the Monthly Salary option was added so that countries that base their salaries on a monthly basis can use that.
shaunw
Posts: 7839
Joined: Tue Sep 19, 2006 2:22 pm

Post by shaunw »

What pay period schedule are your employees on in TimeTrex, bi-weekly or semi-monthly?

If I use a bi-weekly pay period schedule (26 pay periods / year) this is how TimeTrex calculates the tax bracket:

wage base: 16344 / 26 = 628.615
exempt amount: 10896 / 26 = 419.076
628.615 - 419.076 = 209.538 * 10% = 20.95

If I use a semi-monthly pay period schedule (24 pay periods / year ) this is how TimeTrex calculates the tax bracket:

wage base: 16344 / 24 = 681
exempt amount: 10896 / 24 = 454
681 - 454 = 227 * 10% = 22.70

Do you have it set to a bi-weekly pay period schedule when you really want a semi-monthly pay period schedule?
lsanchez_gutierrez
Posts: 36
Joined: Fri Jan 05, 2007 5:26 pm
Location: San Jose, Costa Rica
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Post by lsanchez_gutierrez »

Thanks, I had it in Bi-Weekly when I was calculating it Semi-Monthly.

Regarding the Monthly Salary option (instead of hourly and yearly), is that in the to do list for TimeTrex?
shaunw
Posts: 7839
Joined: Tue Sep 19, 2006 2:22 pm

Post by shaunw »

It is, but at a very low priority at this point.
lsanchez_gutierrez
Posts: 36
Joined: Fri Jan 05, 2007 5:26 pm
Location: San Jose, Costa Rica
Contact:

Post by lsanchez_gutierrez »

I've been working on the Monthly Salary option and will send it to TimeTrex. This Option will give you a fixed monthly salary which will be divided according to you pay period schedule and it also includes a Ajax server calculation for the hourly wage for that salary.
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