Earning Definitions

About Earning Definitions

Earnings which will be used in your company must be defined on the Earning Definition Screen (ED).

 

The VIP Classic Payroll and VIP Essentials Payroll Systems cater for up to 36 individual earning lines for each of which multiple methods of calculation can be defined.

The VIP Premier Payroll System caters for up to 72 individual earning lines for each of which multiple methods of calculation can be defined.

If you would like to use more than 36 Earning lines, the Additional Earnings and Deductions Functionality should be activated on the Company Miscellaneous Screen. This functionality may be activated by a VIP Consultant.

 

Once an Earning has been added on the Earning Definition Screen (ED), it will be displayed on each employee’s Payslip Screen.

 

How to Access the Earning Definition Screen

To access the Earning Definition Screen from the VIP Main Menu:

  1. Click on Payroll.
  2. Click on Definitions.
  3. Click on Earning Definitions.
  4. The Earning Definition Screen will be displayed.

 

Earning Definition Screen

In most instances this screen will already be set up according to your company's requirements. You may however add earnings, make changes to the existing setup, or delete earnings that are not used.

 

When Earning Definitions have been added or certain fields of existing definitions have been edited, a Recalculation will be done automatically. New definitions and changes made to the following fields of the Earning Definition Lines will trigger the automatic Recalculation once you exit the Earnings Definition Screen:

 

 

How to Add an Earning

  1. Click on the <Change Mode> button at the bottom of the screen.
  2. Click in the Short column of the first available line. Enter a short description for this earning. This will be the description that you will see when working on the system.
  3. Click in the English column. Enter a meaningful description for this earning. This will be the description that prints on the employee's payslip.
  4. Click in the Alternate column. Enter a meaningful description for this earning. This will be the description that prints on the employee's payslip, when the language of the employee is set to 'Alternate' if you make use of another language in your company.
  5. Click in the Earning Type column. Select the required Earning Type from the list provided for this earning.
    • See Useful Information on this Screen below for more detail.
  6. Click in the When Taxable column. Select the required option from the list provided for this earning.
    • See Useful Information on this Screen below for more detail.
  7. Click in the BCEA column. Select the required option from the list provided for this earning.
  8. Click in the RFI column. Select the required option from the list provided for this earning.
  9. Click in the IRP5 column. Select the required option from the list provided for this earning.
  10. Click in the Incl SDL column. Select the required option from the list provided for this earning.
    • See Useful Information on this Screen below for more detail.
  11. Click on <Close>.
  12. This earning will now be displayed on all employees' Payslip Screens.

 

 

How to Change an Earning

  1. Click on the <Change Mode> button at the bottom of the screen.
  2. Click in the column where changes should be made.
  3. Make the necessary changes, then click on <Close>.

 

 

It is advisable to contact the VIP Call Centre before making changes to this screen, as it may have a tax implication on your Payroll.

 

 

How to Delete an Earning

  1. Click on the <Change Mode> button at the bottom of the screen.
  2. Click in the Short column of the earning that you want to delete.
  3. Delete the description, then press <Enter>.
  4. The earning will be deleted from the screen.

 

You will not be able to delete an earning if there are year-to-date totals on that line.

 

It is advisable to contact the VIP Call Centre before deleting earning lines.

 

It is advisable to delete unused earning lines at the start of the tax year.

 

Useful Information on this Screen

 

 

Basic Salary/Wage)

The first earning line is automatically allocated to the Basic Salary or Wage and this Earning Type cannot be used for any other line.

 

Accumulate 

This Earning Type has a balance facility where the balance increases every pay period.

 

Annual Bonus

This Earning Type must be used if you want VIP to automatically calculate the bonus according to the percentage defined on the Basic Company Information Screen.

 

Calculate

The system will automatically calculate an amount according to a formula or fixed amount specified in a Method of Calculation. No extra input in hours or units is required.

 

Hourly Input

Use this option if you are going to enter the number of hours worked for an employee. A Method of Calculation will have to be defined to calculate the monetary value according to the hours that are entered.

Example: Overtime Hours

 

Not Calculated

These earnings must be manually entered on the Payslip Screen.

Example: Commission

 

Payouts

This Earning Type is a Never Taxable Earning without an IRP5 Code which is used to pay out amounts to an employee, e.g. Savings or Reimbursements. This Earning Type is not included in the calculations of Total Cost as it is not a Salary Cost to the employer. All costing amounts in VIP automatically exclude Payouts.

 

Rounding

This Earning Type must be specified when Rounding of the Nett Wage/Salary is required.

 

Unit Input

Use this option if you are going to enter the number of units for an earning. A Method of Calculation will have to be defined to calculate the monetary value according to the units that are entered.

Examples: The number of days worked or the number of kilometres travelled.

 

 

This is where you indicate to the system how the earnings must be taxed. Earnings may be set up as Monthly/Weekly, Periodic, Not Taxable or Travel.

 

Monthly/Weekly taxable

This code is used for all Earnings subject to the normal monthly/weekly tax, e.g. Basic Salary, Overtime, Commission, etc.

 

Never taxable

This is used for non-taxable Earnings, e.g. Reimbursements.

 

Periodic taxable

This code is used for annual payments, e.g. Annual Bonus and for certain once-off payments, e.g. Termination Leave Pay.

 

Travel taxable

This code must be used for any travel allowance. When this code is selected, 80% of the full amount will automatically be taxed. The full amount of the travel allowance must be reflected on the Payslip Screen. The taxability of the travel allowance can be adjusted on the Basic Employee Information Screen on the Travel and Company Car Tax Tab, being either 80%, 20% or 100%.

 

 

When you click on this button, all flags will be reset according to VIP recommended defaults.

 

SDL Options

Full: Full value included.

Not Included: No value included.

Travel: Only taxable portion included.

Public Allowance: Only taxable portion (50%) included.