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Former Member

Calculate share incentives on a percentage of Net pay, then Tax the Bonus

Hi Gurus,

We are looking at Providing Share incentive when Employee elected to purchase shares with their Bonus. They would get 25% Share Incentive on the NET of their Bonus. Then we need to tax the Incentive share paid.

How should be go about to do that?

Thanks!

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3 Answers

  • Sep 25, 2017 at 04:48 PM

    Do you have only one Bonus WT or many? Will the Share Incentive be applicable to all Bonus WT?

    How is the Bonus paid? Through IT0015 on a Regular Pay or an Off-Cycle Pay?

    What will be the "trigger" to tell the system that an employee has elected to purchase Shares with his/her Bonus?

    If you were to create a Share Incentive WT for IT0015 that allows only a Number/Unit, and then create an IT0015 for an employee that has elected to purchase Shares, you could create a pcr to process the Bonus WT and put it's Amount into a Temporary Variable (through Operation ADDWT&XXXX), and an other pcr to process the IT0015 trigger,replace the NUMber by 25 (or a Constant from V_T511K with that value), replace the AMounT by the Temporary Variable, multiply the Number by the Amount (MULTI NAA) and divide the resulting Amount by 100.

    As for Taxes, since I presume that it would not be a Periodic Payment, I would assume that for the Share Incentive WT, you would check Cumulator 03 in V_512W_D.

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    Former Member
    Sep 28, 2017 at 07:41 PM

    Hi Rémi,

    Thank you for your answer!

    To answer your questions:

    - One Bonus Wage type paid using IT0267 during one OFF-CYCLE Bonus Run

    - As for the trigger, let's assume the WT entered in IT0267 is the trigger, meaning it spits out incentives shares not matter what.

    The steps in payroll I am expected to deliver are:

    1. Process Bonus Wage type and Get Net (after tax) proceed of Bonus

    2. Based on the Net (after tax) of the Bonus, calculate 25% of Incentive Shares

    3. Tax Incentive Shares

    4. Net pay for the bonus run will be = Bonus Net + Incentive Share Net

    Makes sense?

    Thanks!

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    • Former Member

      Bonjour Rémi,

      Thank you very much for your help. I was in denial I guess. I did not want to get to this solution. I will keep you posted on how we went about to achieve this in the end.

      Thanks again!

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    Former Member
    Nov 10, 2017 at 05:25 PM

    Just an update on this, we had the wrong requirements. The Incentive share are getting reported to CRA by Solium. So the we do not have to calculate tax on our payroll system.

    We only have to generate the Incentive Share based on the Net proceed of the Bonus, which is not an issue. Thanks again for your help Rémi.

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