About Methods of Calculation
Methods of Calculation are valuable time-saving tools on the VIP System. They enable the VIP program to calculate amounts automatically, thereby avoiding manual calculations and much tedious input by the user.
- Methods of Calculation can be specified for Earnings, Deductions, Calculation Fields or Special [i.e. RFI (Retirement Funding Income), Medical Aid Perk and Provision on Annual Bonus].
- A formula, fixed amount or a table may be defined for each Method of Calculation.
- A formula consisting of up to eight steps can be set up in a Method of Calculation. When a formula is more complicated, and requires more than eight steps, methods can be linked to each other.
Earning Methods
Methods of Calculation for Earnings
A Method of Calculation can be added for any Earning Line that has been defined under the Earning Type column as any of the following:
- Basic Salary/Wage.
- Calculated.
- Hourly Input.
- Unit Input .
- Annual Bonus.
- Payouts.
- Accumulate.
The Earning Type must be defined correctly on the Earning Definition Screen.
If an Earning Line has been defined as Not Calculated, it is not possible to create a method for that Earning.
Earning Lines that have been set up with any of the above-mentioned Earning Types, will be marked with an "*" on the Methods of Calculation Screen, indicating that a Method of Calculation can be added for that Earning.
For more information about Earning Types, see Earning Type Options.
Deduction Methods
Methods of Calculation for Deductions
A Method of Calculation can be added for any Deduction Line that has been defined under the Deduction Type column as any of the following:
- Pension and Arrears Pension.
- Provident Fund.
- Medical Aid.
- Calculated.
- Loan.
- Savings.
- Additional Tax.
- Unit Input.
- Hourly Input.
The Deduction Type must be defined correctly on the Deduction Definition Screen.
If a Deduction Line has been defined as Not Calculated, it is not possible to create a method for that Deduction.
Deduction Lines that have been set up with any of the above-mentioned Deduction Types, will be marked with an "*" on the Methods of Calculation Screen, indicating that a Method of Calculation can be added for that Deduction.
When you add a Method of Calculation for a Deduction, you can add a method for the Company Contribution as well, on the same screen.
For more information about Deduction Types, see Deduction Types.
Calculation Field Methods
Methods of Calculation for Calculation Fields
A Method of Calculation can be added for any Calculation Field Line that has been defined under the Type of Calc column as one of the following:
- Calculated.
- Unit Input.
- Hourly Input.
The Calculation Type must be defined correctly on the Calculation Fields Definition Screen.
If a Calculation Field has been defined as Not Calculated, it is not possible to create a Method for that Calculation Field.
Calculation Fields that have been set up with any of the above-mentioned Calculation Types, will be marked with an "*" on the Methods of Calculation Screen, indicating that a Method of Calculation can be added for that Calculation Field.
Types of Methods of Calculation
There are three different types of Methods of Calculation that can be defined:
| Type of Method | When do I use this Type of Method? |
|---|---|
| Fixed Amounts | Where a fixed amount is applicable to all or a selected number of employees, e.g. fixed transport allowance. |
| Calculations | When a formula must be used in the calculation, e.g. a percentage calculation. |
| Tables | When tables for the calculation are supplied and the values are based on the employees’ age, taxable earnings, monthly/weekly basic salary, total earnings or dependants. |