Adjustment Types

Adjustment Types

An adjustment is an amount that affects an employee's take home pay. This amount may either be added or deducted from the employee. Adjustments may be applied to the employee’s regular payroll run or through special pay run.

Adjustment Types

There are different types of adjustments in Salarium. The four available adjustment types that can be utilized are the following:

Taxable Income
  • Part of an employee’s income that needs to be added or deducted from the net income
  • Subject to tax computation by the end of the fiscal year upon annualization
  • Example: Overtime pay adjustment that should have been included in the previous cut-off, Taxable allowances

Non-Taxable Income
  • Part of an employee’s income that needs to be added or deducted from the net income
  • The non-taxable income on top of other non-taxable payroll items exceeding the Php 90,000 amount limit is subject to tax computation by the end of the fiscal year 
  • Example: Non-taxable allowances, De Minimis, a non-taxable bonus that an employee should have received on the previous pay.

Tax Adjustments
  • Adjustments on tax usually happens after annualizing tax or as a result of tax miscalculations. Tax adjustments may either be added as a tax refund or deducted as tax payable.

Non-Income
  • These items are not considered part of employees’ income that needs to be added or deducted from the net income.
  • Example: Reimbursements, Financial Assistance

Note:
When adding adjustment whose Adjustment Type is either TAXABLE INCOME, NON TAXABLE INCOME or NON INCOME, the amount must have a negative (-) sign when the adjustment must be deducted from the employee.
However, when adding adjustment whose Adjustment Type is TAX ADJUSTMENT, the amount must have a negative (-) sign when the adjustment is to be refunded/credited to the employee.



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