FDS Average

The 'Heading' section of the FDS - Forecast Average tax calculation displays:

TaxDisplay-Average - Heading

Company Name	The name of the company, or organization under which the employee is engaged.
Payroll Name	The name of the particular payroll that the employee is included in. An organization may have several payrolls, one for executive salaries, another for general salaries, another for wages etc.
Employee No.	The Employee number allocated to the individual by the organization for whom the FDS Average method tax display is being produced.
Employee Name	The Employee Name for the individual for whom the FDS - Forecast Method tax display is being produced for
Date	Date on which this FDS Average method tax display is being printed
Period	The period being examined. The FDS Average method tax display can be printed for any current, or past, period.
Belina Version	The Belina PayrollHR version number being used to produce this report
FDS Method	The FDS tax method that has been set-up to calculate the PAYE amount for this individual, in this case the FDS Average method.
Tax Table Type	The tax table used in the calculations.

The projection of income includes:

•the projection of Regular income

•the inclusion of Irregular income

•Bonus Earnings

•Pension Deductibles

Regular Income

The projection of regular income, in the FDS - Average Method of tax calculation, is done in the following manner for each Transaction Code:

TaxDisplay-Average - Projection

'This Period'	Value processed in the current period
'Previous'	Total value processed in all the prior periods of the current tax year
'Projected'	(The total value of 'Previous') + ('This Period' x Number of remaining periods)
'Periods to Date'	The 'Periods' column in the spreadsheet side of the picture, below, shows the number of periods that have been used in the current tax year, including the current period.
'Projection'	The 'Projection' column shows the actual taxable earnings to date, 'Total To Date', divided by the number of 'Periods to Date' multiplied by the total number of standard periods in the year.

Irregular income is not projected. It is simply listed showing two totals. The total for 'This Period' and the total for 'Previous' period/s. These totals are used later in the calculation of PAYE. Tax on irregular income is calculated and deducted in the period in which it is earned. You will notice later that we calculate the tax related to irregular earnings in a two step process:

•by calculating the tax on earnings to date excluding current period irregular earnings, then by

•calculating the tax on earnings to date including current period irregular earnings

•by subtracting the answers of the two, above, the tax on the current period irregular earnings will have been computed.

TaxDisplay-Average - Irregular

The Bonus section of the FDS - Average Method tax calculation displays:

TaxDisplay-Average - Bonus

'Bonus - Annual (Interim)'	The amount of annual bonus, subject to a tax free element, received 'This Period' and the amount received 'Previous'
'Bonus Tax Free'	The ZIMRA approved tax free element of an annual bonus.
'Bonus YTD'	The amount of annual bonus, subject to a tax free element, received 'Previous'
'Bonus This Period'	The amount of annual bonus, subject to a tax free element, received 'This Period'
'Bonus Taxed'	The amount of annual bonus, that has exceeded the 'Bonus Tax Free' and is subject to taxation

The Pension section of the FDS - Average Method tax calculation displays a listing of pension Transaction Codes that have transactions:

TaxDisplay-Average - Pension

The table shows the Pension fund, the contribution 'This Period' and the contributions made in prior period/s, 'Previous' together with a 'Projection' of the total contribution for the year. The 2013 maximum pension deductible amount is $5400 or 7.5% of earnings which translates to $450 per month. The 'Deductible Pension' amount will be limited to these amounts.

TaxDisplay-Average - Deductibles

Step 1 - Calculate Net Projected Regular Income (including known irregular income up to but excluding the current period)

TaxDisplay-Average - Regular TI

Projected Regular Income (Above)	$ 71626.71
Less: Projected Deductible Amount	$ 2700.00
Regular Taxable Income	$ 71554.71

Step 2 Calculate the Tax Payable on Regular income Calculated in Step 1

FDS Average - Tax Payable

Step 3 - Calculate the Tax Payable on Regular income plus current period Irregular Income

Regular Taxable Income	$559930.48
Irregular Income	$627.56
Total Income	$72182.27

FDS Average - Tax Payable2

Step 4 - We now calculate the tax payable on Regular Income for the current period

FDS Average - Tax Payable3

To narrate the above steps:

First calculate the amount of tax that should be paid on Regular Income for the year, then	19644.15
Calculate the average amount of tax that should be paid per period (using the full tax year) - (19466.15/ 12), we then	1637.01
Calculate the amount of tax that should have been paid to date (Average Tax x No. of Periods to Date = 1637.01 x 4), we then	6548.05
Subtract PAYE paid in prior periods and deduct Total Tax Credits	4825.08
PAYE payable on regular income	1637.01

Step 5 - Calculate the tax payable on the Irregular income earned this period

FDS Average - Tax Payable4

Take the 'Tax payable' on Regular plus Irregular income, calculated in Step 3 and subtract the 'Tax Payable on regular income', calculated in Step 2. The result is the amount of taxation due on irregular income for the period, since tax on irregular earnings is calculated and paid in the period in which it is earned.

Step 6 - Tax Payable

The total Tax Payable is the total of:

Tax on Regular Income, calculated in Step 3	1637.01
Tax on Irregular Income, calculated in Step 4	219.66
	1942.62

Step 7 - Aids Levy

The final step in the calculation is to deal with the Aids Levy. The calculation looks at the amount of Aids Levy that should have been paid to date on 'PAYE to date' ($6767.70 x 3% = $203.03) less what has already been paid ($144.75) which leave $58.28 outstanding to be paid in the current period.

FDS Average - Aids Levy

This is then added to the amount of tax payable on Income (Step 6) to give a Total Tax payable this period.