What is the purpose of the "is this employee retired?" checkbox on the Basic Profile screen?
This feature is available on all PaySpace editions.
This option is used for the Pension/Provident/Retirement Annuity calculation for legally retired employees. No fringe benefit is applicable if the employer contributes towards a retirement fund on behalf of an:
- Employee who retired from the fund, or
- In respect of dependents or nominees of a deceased member of the fund.
If an employer contributes to any of these funds on the employee's behalf, no fringe benefit will be calculated, and the following tax codes will be used:
- 4585 - The pension fund contribution paid by the employer of an employee who has retired from the fund.
- 4586 - The provident fund contribution paid by the employer of an employee who has retired from the fund.
If the employee retires from the fund in the middle of the tax year, the user should terminate the current record and add a new record (reinstate starting a new record). On the new record, the user must activate this field and no fringe benefit will be calculated on the payslip.
Navigate > Employee > Basic Information > Basic Profile > Employee
Navigate > Employee > Payroll Processing > Recurring Payroll Components
In order to mark an employee as "retired" with respect to Medical Aid, the "retired" checkbox may be enabled on the Medical Aid Recurring Payroll Component.
Navigate > Employee > Payroll Processing > Recurring Payroll Components > Company Contributions > Medical Aid
The Medical Aid company contribution will reflect tax code 4493 - Employer’s medical scheme fees (contributions) paid for the benefit of a retired/former employee who qualifies for the “no value” provisions. No Fringe Benefit is applicable.
Navigate > Employee > Payroll Processing > Edit Payslip
An employee who is 65 years of age or older will be eligible for an Additional Medical Expenses Tax Credit in respect of Medical Aid Contributions.
The Additional Medical Expenses Tax Credit will appear on the employees Edit Payslip screen under the Notes section, irrespective of the employee being retired.
Navigate > Employee > Payroll Processing > Edit Payslip > Notes
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