Purpose
At the end of each calendar year, employers are required to give to each employee and the Inland Revenue Board (IRB) a statement (Form CP8A/EA) showing the total remuneration paid for the year and the amount of tax deductions made.
Although a schedule is provided by the IRB, the system uses a pre-determined formula that reflects the schedule.
Prerequisites
Process Flow
The processing steps for determining tax deductions are:
In the case of bonuses, the monthly component is used to calculate the tax on bonus for the month which is projected for the whole year. In this case, the last normal payroll run is used.
Result
The result of this process is the amount of tax payable.