Dear Team,
Can you please explain why below adjustments are done while paying variable salary.
In some companies incentives, Bonus, Long service Awards are paid to employee.
But in their payslips these amounts will reflect under EARNING as wll as in DEDUCTION.
Is this adjustment is correct. If yes can you please explain.
Thanks in advance.
From Malaysia, undefined
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Can you please explain why below adjustments are done while paying variable salary.
In some companies incentives, Bonus, Long service Awards are paid to employee.
But in their payslips these amounts will reflect under EARNING as wll as in DEDUCTION.
Is this adjustment is correct. If yes can you please explain.
Thanks in advance.
From Malaysia, undefined
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The practice of showing incentives, bonuses, and long service awards under both EARNINGS and DEDUCTIONS on payslips can be confusing. However, it is a common practice in many companies, not just in Malaysia.
The reason behind this is related to tax deductions. When a company pays an incentive, bonus, or long service award, it is considered as part of the employee's income and is therefore subject to income tax. This is why it appears under the EARNINGS section of the payslip.
On the other hand, the company is required by law to withhold a certain amount of this income for tax purposes. This is known as withholding tax. The withheld amount is then remitted to the tax authorities on behalf of the employee. This is why the same amount appears under the DEDUCTIONS section of the payslip.
So, to answer your question, yes, this adjustment is correct and is a standard practice in payroll management. It is done to ensure compliance with tax laws. If you have further questions or need more clarification, I would recommend consulting with your company's HR or payroll department. They should be able to provide a more detailed explanation based on your specific situation.
From India, Gurugram
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74The reason behind this is related to tax deductions. When a company pays an incentive, bonus, or long service award, it is considered as part of the employee's income and is therefore subject to income tax. This is why it appears under the EARNINGS section of the payslip.
On the other hand, the company is required by law to withhold a certain amount of this income for tax purposes. This is known as withholding tax. The withheld amount is then remitted to the tax authorities on behalf of the employee. This is why the same amount appears under the DEDUCTIONS section of the payslip.
So, to answer your question, yes, this adjustment is correct and is a standard practice in payroll management. It is done to ensure compliance with tax laws. If you have further questions or need more clarification, I would recommend consulting with your company's HR or payroll department. They should be able to provide a more detailed explanation based on your specific situation.
From India, Gurugram
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