Set up country profiles and income tax slabs

A country profile holds one country's statutory payroll rules: the social insurance rates for employee and employer, the salary cap, and the income tax method with its slabs. Use profiles when your branches operate in different countries, so that each branch's payroll follows its own country's rules.

Before you start

• Each branch must have its country set on the branch record. The system finds a branch's profile by matching that country to the profile's three-letter Country Code.

• Decide where payroll reads statutory figures from. In HR settings, the setting Statutory figures come from offers These payroll settings (the default) or The branch's country profile. Profiles affect payslips only with the second choice.

Create a country profile

1. Open People › Payroll › Global Payroll Localization. The Country Profiles tab opens.

2. Select New Profile.

3. Enter the Country, the Country (Arabic) and the Country Code, for example EGY or SAU. The code must be three letters, and each country can have one profile only.

4. Enter the Currency code and its Symbol.

5. Under Social Insurance, choose the scheme, then enter the Employee SI Rate, the Employer SI Rate and the SI Salary Cap. Enter rates as whole percentages: 11 means 11%. A cap of 0 means no cap.

6. Choose the Tax Type. For a flat tax, enter the Flat Tax Rate.

7. Keep Active on and select Save.

The Country Code and the Currency cannot be changed after you save the profile.

Add progressive tax slabs

1. On a profile whose tax type is progressive, open the row's Actions menu and choose Tax Slabs.

2. Enter the bracket: From, To and Rate, with an optional Label. Leave To empty for the top bracket, which is Open-ended.

3. Select Add Slab. Repeat for each bracket, from the lowest upwards.

Enter the slab amounts as annual income. To correct a bracket, delete it and add it again.

How payroll applies a profile

When HR settings use the branch's country profile:

• Social insurance is the employee rate times the basic salary for the period. When the basic salary is above the cap, the cap is used instead. The employer contribution uses the employer rate on the same base and does not reduce the employee's pay.

• Income tax is calculated only when automatic tax calculation is on in HR settings. The run takes the employee's monthly taxable income, multiplies it by 12, applies each slab's rate to the part of the income inside that slab, and divides the annual tax by 12. A flat tax applies the flat rate to the same taxable income.

• Taxable income is gross pay minus social insurance, benefit contributions, absence and regulatory deductions, and minus allowances whose component is not taxable. Loan installments and penalties do not reduce it.

The payslip records the rates, cap and brackets it used, so a later change to a profile does not alter payslips that already exist.

Common questions

Do profiles change payroll on their own? No. Until HR settings point to the branch's country profile, payroll uses the rates and tax slabs in HR settings, and profiles serve for planning and comparison.

How can I check a figure before I process payroll? Use the Deduction Preview tab, described in branch regulatory deductions.