Rehiring Persons in Jamaica: YTD Tax Allowance (PAYE)

When rehiring persons who were separated earlier this year, the Year-to-Date (YTD) Tax Allowance must be calculated and entered into the payroll for the employee, to facilitate accurate PAYE calculations. 

Please take note of the following steps to rehire an employee who was separated earlier this year. 

1. Rehire the employee as an Employee Transaction
   

PowerPay >> Process  Payroll >> Employee Transactions >> Rehire Employee 

Select the name from the list of Ex-Employees.  Enter the rehire date. Enter details of rehire position and Save. Post the Record.

2. Update salary details via a Salary Change transaction
   

*Only if employee now has a different salary than what he/she was earning when separated.

PowerPay >> Process Payroll >> Employee Transactions >> Salary Changes

Enter relevant details and Save. Post the Record. 

Verify the relevant Salary Change entries appear in Cycle Changes screen for that pay cycle.

3. Calculate employee’s YTD Tax Allowance
   

(Annual Tax Allowance ÷ number of pay cycles in Active Year) x number cycles paid at separation

(i) Jamaica Annual Tax Allowance = $ 1,500,096.00

(ii) Verify number of pay cycles in active year PowerPay >> Pay Cycles>> Pay Cycles screen:

Monthly paygroup: 12 cycles

Fortnightly paygroup: 25 – 27 cycles 

Bi-monthly paygroup: 24 cycles

Weekly paygroup: 52 cycles

(iii) Number of cycles paid at separation:

PowerPay >> Employees>> Pay Profile>> Prior Periods Payroll Data

Count the number of cycles employee was paid. Click the icon to expand the record. Select Earnings to verify employee was actually paid in each cycle. 

Worked Example YTD Tax Allowance:

Fortnightly Paygroup (26 cycles). 

Employee was paid for 2 pay cycles this year before separation.

(Annual Tax Allowance ÷ number pay cycles in Active Year) x number cycles paid before separation

=     ( 1,000,096.00    ÷  26   )      x  2

= $ 76,930.46

4. Enter a Tax Allowance cycle change (P - TA6)
   

PowerPay >> Proces Payroll >> Cycle Changes 

Enter a P- Pay Profile, TA6 – Tax Allowance entry as shown below.

5. Process Payroll as normal. 
   

i.e. Enter Timesheets hours for non-salaried employee, or no changes for salaried  employee.

Prepared by: Francies M. Bruce