Severance pay 

Features

Severance pay is a monthly reserve fund which equals 13,5% of the employee’s remuneration, and which is managed by the system components.

• Reserve
• Revaluation
• Taxation and settlement

The calculation of the reserve takes place only if the employee has the necessary conditions. For this purpose the system checks the employee’s actual workdays within the month.

A payroll function manages the severance pay month-for-month revaluation according to the accrued reserve (actual if calculated upon the previous month, or theoretical if calculated upon the current month). Such revaluation is made up of:

• 90% down payment of the revaluation tax in November;
• 11% tax on previous year revaluation in January, along with the down payment clearing with the actual tax.

Since 2001 the revaluation of severance pay is taxed, and the tax is settled each year. The system therefore provides wage type “couples” with the same functions, whereas one refers to the fund before 2001, and the other to the reserve since 2001.

Another function generates the wage types for the settlement of the severance pay.

Other calculations carried out by the system and connected to the severance pay are:

• Calculation of average part time percentage
• Calculation of reference income
• Calculation of average tax rate
• Calculation of tax base reductions
• Calculation of tax deductions

 

Integration

A particular payroll function calculates IRPET on severance pay and on other severance pay bonuses.

Infotype 0155 manages the employee’s data which are necessary for calculating the settlement /revaluation of his/her severance pay.

Infotype 0156 defines the grouping indicators for severance pay taxes among others.