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Discussion in 'Employment Law' started by kroshka, Sep 1, 2017.

  1. kroshka

    kroshka Member

    Jul 17, 2016
    Happy Eid..

    And sorry to use this day for asking a work related question. I am looking for an answer to question about tax on salary - PPH21. Any smart payroll people in the group?

    The employer reports, withholds (deducts the tax from salary) - and transfers the PPH21 to the tax people.

    As far as I know PPH21 is paid based on yearly income - calendar year.

    Some use the calculation - monthly salary x 12 (13) months to determine your tax %'s. Which might also be ok if you get the same salary every month, AND if you are employed all 12 months.

    But what should an employer do in the situation where an employee starts working for instance in September. The employer has no knowledge about the employees previous income or tax paid in the first 8 month of the tax year - and maybe the employee has not had any income in the first year.

    The employee is single and gets a salary of 18 mio. per month - meaning 90 mio. salary from the employer in 2017.

    Should the tax be calculated based on 12 (13) times the monthly salary - which will result in that he will pay too much in tax? The case is even worse if you get 40 mio. per month - as your income then in 2017 will be 200 mio, but you will pay tax based on 480 mio (520 mio)

    I presume if too much tax is paid, then it can be hard to get back from the tax people.

    Any advice appreciated / wishing you all a nice long week end.

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