Process retrenchment or severance payments

How to process payments of retrenchment or severance lump sum amounts on Sage VIP Classic and Sage VIP Premier.

Define a lump-sum earning line

Setup and review the earnings and deduction definitions:

• Adding a lump sum earning definition
• Adding a tax on lump sum deduction definition

 Enter tax directive details

Complete the details of the tax directive you received from the South African Revenue Service (SARS).

• Add a tax directive for an employee

 Process the amounts on the payslip

1. Access your South African company from the company listing screen.
2. From the Main Menu, go to Payroll.
3. Select Payslip Screen.
4. Select the employee from the list and click Continue.
5. Click the Earnings tab.
6. Enter the amount on the severance lump sum earning line.
   • Ensure the IRP5 code for this line 3901
7. Click the Deductions tab.
8. Enter the tax amount as per directive on the tax on lump sum line.
   • Ensure the IRP5 code for this line is 4115
9. Click Close to save the amounts,
10. click Close to return to the Main Menu.

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