Before calculating individual income tax, you must enter the directories of income and deduction codes in the Income codesand Deduction, discount, and benefitforms, respectively. For income codes, corresponding pay types are configured. You must configure general settings for calculating taxes in the Tax calculation settingsform, and then enter discounts and benefits for employees in the Rate valuesform.

When calculating the monthly wages for individual income tax purposes, use the tax calculation method, which allows the calculation of deductions and individual income tax for each employee. To create the accrued individual income tax, use the data and funds calculation periodic operation. You can view the calculated individual income tax and print the 1-NDFL and 2-NDFL forms in the Withholding taxform. You can enter employee income from previous workplaces to create the taxable base used when calculating deductions for employees, if necessary. The Income data registerform is provided to generate annual tax returns for submittal to the tax authorities.

Set up tax deduction codes to calculate individual income tax

  1. Click Staff accounting> Income tax> Setup> Income tax> Deduction, discount, and relief codesto open the Reliefs and deductions on off-budget fundsform.

  2. Press CTRL+N to create a new tax deduction code.

  3. In the Deduction codefield, enter the deduction code.

    Note Note

    The list of deduction codes must correspond to the directory specified by the tax authorities.

  4. In the Deduction typefield, select the tax deduction type as Standardor Others.

  5. In the Namefield, enter the description of the deduction code.

  6. In the Rate (value)field, select the payroll rate number that determines the deduction amount.

  7. In the Rate (reference)field, select the payroll rate number for the deduction number used by an employee.

    Note Note

    The employee's right to the deduction for the housing acquisition and the amount of this deduction are set up as appropriate rate values in the Setup general ratesform. These rate codes must be selected in the Rate (value)and Rate (reference)fields.

  8. In the Sequencefield, select the sequence in which the deduction amount must be calculated in the tax calculation procedure.

    Note Note

    This field is active only if the Rate (reference)is specified and Rate (value)is not specified.

  9. In the Period of validityfield, select the duration for which this deduction is valid.

  10. Select the Tax refundcheck box to allow refund of tax deducted from the beginning of the year.

    Note Note

    This check box can be edited only for Standarddeduction types.

  11. Press CTRL+S or close the form.

Set up income codes for calculating individual income tax

  1. Click Staff accounting> Income tax> Setup> Income tax> Income codesto open the Income codesform.

  2. Press CTRL+N to create a new income group.

    Note Note

    The Overviewtab displays the income groups that classify incomes by income group type for calculating the individual income tax.

  3. In the Income group codefield, enter an income group code.

  4. In the Typefield, select a method based on which the individual income tax is calculated for the specified income group code.

    Note Note

    The total income is determined by the sum of the calculations entered into the group. The percentage tax rate is determined by the value of the rate specified in the Rate for residentsfield. Only one line can be created for each type of income group.

  5. In the Namefield, enter a text description of the income group.

  6. In the Rate for residentsfield, select the tax rate for calculating individual income tax for residents.

  7. In the Rate for non-residentsfield, select the tax rate for calculating individual income tax for non-residents.

  8. In the Pay typefield, select the pay type for deducting individual income tax, calculated for the income group.

  9. Click the Generaltab.

  10. In the Future period taxfield, select the pay type used for deduction to reflect individual income tax for future periods.

    Note Note

    This field can be edited for the Basic income (13%)income group, and with the method of calculating individual income tax for future periods, in the month when the income was received.

  11. In the Last year's debts repaymentfield, select the deduction type to reflect the settlement of a salary debt from previous tax periods.

  12. In the Budget revenue code (resident)field, select the budget revenue classification code for residents.

  13. In the Budget revenue code (non-resident)field, select the budget revenue classification code for non-residents.

  14. On the Overviewtab, select an income group code and click the lower pane to create income group lines for the selected income group.

  15. Press CTRL+N to create a new income code.

  16. In the Income codefield, enter the income code.

    Note Note

    The list of income codes must correspond to the directory specified by the tax authorities.

  17. In the Namefield, enter the name of the income code.

  18. In the Income typefield, select the income type.

  19. In the Deduction codefield, select a deduction code for incomes for which discounts are specified.

    Note Note

    The deduction code can be selected for only Income after deductionand Income after deduction (RF)income types.

  20. Repeat steps 15 through 19 to create a number of income codes for each income group.

  21. Press CTRL+S or close the form.

  22. Select Staff accounting> Setup> Calculation> Pay typesto open the Pay type setupform.

  23. In the Income codefield, for each pay type, select the income code that the type of accrual relates to.

    Note Note

    To create a new pay type, press CTRL+N and enter the required details. Income codes can be selected only if the category of the pay type is Income.

  24. Press CTRL+S or close the form.

Set up individual income tax

  1. Click Staff accounting> Income tax> Setup> Tax calculation settingsto open the Tax calculation settingsform.

  2. In the Income tax ratefield, select the rate which determines the percentage for taxation of incomes paid to the company's employees from profits.

  3. In the Income taxfield, enter the round-off amount for calculating individual income tax.

  4. In the Income group codefield, select the income group ID for non-residents.

  5. In the Non-residentfield, select the rate which determines the employee's status as resident or non-resident.

  6. In the Number of days for residentfield, select the rate for the number of days required for assigning resident status to an employee.

  7. In the Period for defining statusfield, select the rate for the number of consecutive months for which the number of days for residency is defined.

  8. Click the Future period taxtab.

  9. Select one of the calculation methods of calculating individual income tax for future periods accruals:

    • Not calculated– If income for future periods is accounted for in the month in which it was accrued, individual income tax is deducted in the same month no debt is created, either to the tax agent or to the employee.

    • Month the profit was made– If income for future periods is accounted for in the month in which it was accrued, individual income tax is deducted in the month in which the income was accrued monthly and a debt is created to the tax agency.

    • Month in which the profit was made– If income for future periods is accounted for in the month in which it was accrued, individual income tax is deducted in the same month that a monthly debt is created to the employee in the tax record.

  10. Press CTRL+S or close the form.

See Also