COVID crisis: the 2 most frequently asked payroll questions

Written by felix
Posted on 16 Nov 2020 - 3 minutes read

These days our support team receives many corona-related questions. This makes sense, because the virus has a major impact, even on salary processing. Via our support portal we help you quickly and free of charge with all your questions. In this blog we pay attention to the 2 most frequently asked corona questions:

  1. How do I process a temporary reduction of the gross salary?
  2. In an Aruba payroll we see an extra low wage tax deduction due to the gross deduction of corona, is that correct?

How do I process a temporary reduction of the gross salary?

First of all, it concerns a reduction in the gross salary, not a reduction in the net salary. Of course, a gross reduction affects the net wage, but the starting point is and will remain a gross wage reduction.

In this case, the fixed periodic gross salary can be reduced, but it is actually better to continue to use the full fixed periodic gross salary, and also to process a temporary gross deduction in the salary slip on a separate line.

The fact that this is a temporary measure means for Aruba, Curaçao and St. Maarten payrolls that the SVB/SZV wage may not change due to the gross deduction. According to SVB legislation, a temporary increase in salary is not a change in the SVB wage. Consider, for example, a temporary gross substitution allowance for another/higher position. And if a temporary increase does not concern SVB wages and SVB change, the same applies to a temporary reduction in salary in connection with corona.

In Celery, a gross deduction code must be duplicated for this, we prefer to duplicate code 260 for this. This code does concern a gross deduction, but the SVB wage does not decrease by using this code. And that is exactly what we want to achieve.

SVB wage loss will therefore remain based on the full gross wage, not on the temporarily reduced salary.

See also our FAQ on our Support website:

https://support.celerypayroll.com/en/support/solutions/articles/6000234067

In an Aruba payroll we see an extra low wage tax deduction due to the gross deduction of corona, is that correct?

And sometimes even a negative amount of wage tax, and that is indeed correct. A temporary deduction of gross salary also reduces the taxable annual wage. As a result, the wage tax payable on an annual basis will of course also be less.

This actually means that too much wage tax was deducted from previous months in which no corona deduction had yet been made.

Celery automatically adjusts this in the month that the first corona deduction is also deducted from the gross salary. And depending on the situation and the amount of the annual wage, this can result in a one-off very low wage tax deduction, or sometimes even a refund of wage tax. This often concerns a one-off adjustment of the deducted ytd wage tax. In future wage periods, the wage tax deduction will again give a “normal” picture.

See also our FAQ on our Support website:

https://support.celerypayroll.com/en/support/solutions/articles/6000236739

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