PeopleSoft Enterprise Global Payroll for the Netherlands 9.1 PeopleBook

Setting Up Social Security Contributions

This chapter provides an overview of social security elements and discusses how to define social security information.

Note. An overview of social security contributions is discussed later in this PeopleBook.

Understanding Social Security Elements

This section discusses:

Delivered social security deductions.
Delivered labour handicap discount deductions.
Delivered social security net base formulas.
Delivered social security variables.
Viewing delivered elements.

Delivered Social Security Deductions

Global Payroll for the Netherlands delivers a set of deductions for social security contributions with the following naming conventions:

Deduction	Description
SOCAFDnXXXyy	The total contribution (Afdracht) that includes both employee and employer contributions.
SOCINHnXXXyy	The employee's contribution (Inhouding).

Where:

n is 1 or 2 to represent the contribution percentage 1 or 2 defined on the Insurance Premium page.
XXX is the insurance code defined on the Insurance Code NLD page.
yy is NT (Normaal Tarief) or BT (Bijzonder Tarief).

Each deduction has a similar definition:

Calculation Rule is Base * Percent, where:
- Base is a formula that calculates the net base amount.
  
  See Defining Formula Elements.
- Percent is a formula that retrieves the contribution percentage.
Generation Control is SOC GC SOC INS DD or SOC GC ADL INS DD.
Pre Process Formula is SOC FM C AD XXX yy, where:
- XXX is AFD or INH
- yy is BT or NT
This formula retrieves the employee's cumulative insurance data.
Accumulator associated with the deduction is a year to date accumulator, which is required for the cumulative method of calculating contributions. These accumulators are named SOC AC INH yy XXX or SOC AC AFD yy XXX (where yy is NT or BT and XXX is the insurance code).
Supporting Element Override is SOC VR INS CODE, which is a variable that links the deduction to the correct insurance code.

Delivered Labour Handicap Discount Deductions

Global Payroll for the Netherlands delivers these deductions, which are used for tracking the labour handicap discount:

Deduction	Description
HANDKORT WAO	Deduction code for employees on long term disability.
HANDKORT WW	Deduction code for employees on unemployment insurance.

The calculations for these deductions are based on annual threshold values. If employees are paid monthly, the application prorates these values to monthly thresholds before calculating the deductions.

When an employee gets hired or replaced within the company and the employee is labour handicapped, the system applies a discount for WW and WAO. This discount is applied on the total employer contribution part.

For new hires you can apply this discount for three years. If an employee is transferred back within the company after getting disabled, you can apply this discount for one year. Both deductions are linked to the Premium Discount on the Define Payee Data NLD page for Global Payroll for the Netherlands.

Note. The system will not automatically resolve these deductions; you need to assign them on the employee level.

Delivered Social Security Net Base Formulas

Global Payroll for the Netherlands delivers these formulas that calculate the net base amount (Grondslag):

Formula	Description
SOC FM GRND INH NT	Calculates net base for employee contributions on regular earnings (Normaal Tareif)
SOC FM GRND INH BT	Calculates net base for employee contributions on non-regular earnings (Bijzonder Tareif).
SOC FM GRND AFD NT	Calculates net base for total contributions on regular earnings.
SOC FM GRND AFD BT	Calculates net base for total contributions on non-regular earnings

The formulas use the gross base accumulator defined on the Insurance Code page and the parameters that are defined on the Insurance Premium NLD page. The default gross base accumulator is SOC AC LOON TAB.

Delivered Social Security Variables

These variables are delivered for determining the contribution percentage:

SOC VR INHD PCT 1
SOC VR INHD PCT 2
SOC VR AFD PCT 1
SOC VR AFD PCT 2

Viewing Delivered Elements

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements that are designed for the Netherlands. Instructions for running the query are provided in PeopleSoft Enterprise Global Payroll 9.1 PeopleBook.

Defining Social Security Information

To define insurance codes and define social insurance premiums, use the Insurance Code NLD component (GPNL_INSUR_CD) and the Insurance Premium NLD component (GPNL_INSUR_PREMIUM). To define insurance groups, use the Insurance Group NLD component (GPNL_INSUR_GROUP). To define the social security and absence information for each establishment, use the Establishment Table NLD component (GPNL_ESTAB_TBL). This section provides an overview of contribution calculation setup and discusses how to:

Set up sector codes and risk groups.
Define insurance codes.
Define social insurance premiums.
Define social insurance groups.
Define social security information for establishments.

Understanding Contribution Calculation Setup

To prepare a system for calculating contributions, you set up the following:

Insurance codes on the Insurance Code NLD page.
Contribution percentages and parameters for calculating employee's and employer's contributions. You define these on the Insurance Premium NLD page.
Insurance groups on the Insurance Group NLD page.
Social security and absence information for the establishments in the organization.

For each establishment you define the default insurance group for social insurance and additional insurance. Establishment information is recorded on the Establishment Table NLD page.

Global Payroll for the Netherlands delivers insurance codes and rules for social insurance, as well as sample data for additional insurance contributions. You should review and adjust the delivered data, and create new codes and contribution rules for your organization.

Pages Used to Define Social Security Information

Page Name	Definition Name	Navigation	Usage
Sector and Risk Group NLD	GPNL_SECRSK_TBL	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Sector and Risk Group NLD, Sector and Risk Group NLD	Set up social security sector and risk codes.
Insurance Code NLD	GPNL_INS_CD_TBL	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Social Security/Insurance, Insurance Code NLD, Insurance Code NLD	Define codes for all social security insurance, define the insurance type (social or additional), and select the base (Grondslag) for the calculation.
Insurance Premium NLD	GPNL_INS_PREMM	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Social Security/Insurance, Insurance Premium NLD, Insurance Premium NLD	Define employee contributions for social insurance and additional insurance codes.
Insurance Group NLD	GPNL_INS_GRP	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Social Security/Insurance, Insurance Group NLD, Insurance Group NLD	Define insurance groups.
Establishment Table NLD	GPNL_ESTAB_TBL	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Establishment Table NLD, Establishment Table NLD	Define the social security and absence information for each establishment in your organization. Note. You must define establishments on the Establishment Table before you can use the Establishment Table NLD page.

Setting Up Sector Codes and Risk Groups

Access the Sector and Risk Group NLD page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Sector and Risk Group NLD, Sector and Risk Group NLD ).

Sector Code

Enter the social security sector code.

Risk Code

Enter the risk codes that are associated with the sector code.

Defining Insurance Codes

Access the Insurance Code NLD page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Social Security/Insurance, Insurance Code NLD, Insurance Code NLD).

Insurance Type

Select the insurance type. Options are Social and Additional.

Gross Base NT (gross base Tabelloon)

Select the accumulator that stores the employees' gross regular earnings (Tabelloon). Global Payroll for the Netherlands delivers two accumulators:

SOC AC LOON TAB is the base for social insurance.

SOC AC LOON ZVW NT is the base for the combined health insurance (ZVW).

You should review these settings and override them according to your organization's requirements.

Gross Base BT (gross base Bijzonder Tarief)

Select the accumulator that stores the employees' gross non regular earnings (Bijzonder Tarief). Global Payroll for the Netherlands delivers two accumulators:

SOC AC LOON BT is the base for social insurance.

SOC AC LOON ZVW BT is the base for the combined health insurance (ZVW)

You should review these settings and override them according to your organization's requirements.

Defining Social Insurance Premiums

Access the Insurance Premium NLD page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Social Security/Insurance, Insurance Premium NLD, Insurance Premium NLD).

Insurance Number

Enter the insurance number. Each insurance code can have multiple insurance numbers. You can also define different contribution percentages for one insurance code.

Insurance Parameters

Use this group box to define the population for which the premium calculations should be made for, as well as frequency and a split in contributions for the employee and employer.

Frequency	Select to define the period associated with the amounts in the Franchise, Minimum, and Maximum fields. Options are Day, Period and Year. From January 1, 2006, social security calculations are based on employees' pay period. The amounts per period are derived from the day amounts using a fixed factor. Therefore, the system sets the Frequency field to Day for social insurance codes and makes the field unavailable. For additional insurances, such as pension, you can define calculations based on annual earnings or another period. If you select Period, the system uses the pay period to determine the period.
FTE Method (full-time equivalent method check)	The system calculates the franchise minimum and maximum amounts using one of the following FTE methods: SS Days (social security days): Franchise amount is based on the actual number of days worked in the payroll period. This information is derived from the work schedule. Note. From January 1, 2006 the system sets FTE Method to SS Days for the standard social insurance codes and makes the field unavailable for entry. Wrkd Days (worked days): The franchise amount is based on the number of days per week that the employee worked. This information is recorded in the Workdays/Week field on the Job Data - Job Information page. Pyment Pct (payment percentage): The franchise amount is based on the FTE field on the Job Data - Job Information page.
Minimum Age and Maximum Age	Enter the minimum or maximum age at which the employee becomes eligible for the selected insurance. For example, employees start contributing towards the pension insurance at 25 and stop at age 65. The system calculates contributions when the employee's age is equal to or greater than the minimum age, and less than or equal to the maximum age.
Increase Percentage Employee	The system calculates contributions based on a gross base calculated for each employee. Most contributions are based on this gross amount. If the employee contribution uses a different base, enter the percentage increase to the gross base. For example, if the base for a contribution should include employee's paid holiday, you enter 8 to increase the gross base by 8%.
Increase Percentage Employer	If the employer contribution is not based on the gross base, enter the percentage increase.
Determination Date	Select to define the date used to calculate an employee's age. This is required for determining employee eligibility for insurance codes that have a minimum or maximum age defined. Options are First Day and Last Date (of the payroll period).

Insurance Premium 1

Use this group box to define the employee contributions for the selected insurance code. For some insurance, there are two contribution percentages for different earnings bands.

Here is an example of how you set up two percentages. Assume that pension contributions are 5 percent for annual earnings up to 8000 EUR and 7 percent for earnings over this limit. You would define the employee fields as follows:

For the first contribution percentage, Employee Percentage 1= 5%, Employee Franchise 1= 0, Employee Maximum 1 = 8000.
For the second contribution percentage, Employee Percentage 2=7%, Employee Franchise 2 = 8000, Employee Maximum 2 = 999999.

Employee Percentage 1	Enter the employee's contribution percentage for the insurance. If there are two contribution percentages, use the Employee Percentage 2 field to enter the second percentage and use the minimum and maximum fields to define the ranges.
Employee Franchise 1	Enter the amount that is exempt from social security contributions. The system deducts this amount from employees' earnings before calculating their social security contribution. The franchise amount is associated with the Frequency field. For example, if you enter 50 in the Employee Franchise 1 field and select Day in the Frequency field, then 50 EUR a day of the employee's earnings are exempt from social security contributions.
Employee Minimum 1 and Employee Maximum 1	Enter the earning band for the contribution percentage that you entered in the Employee Percentage 1 field. The minimum and maximum amounts represent earnings for the period defined in the Frequency field. For example, if you enter 150 in the Employee Maximum 1 field and Day in the Frequency field, the contribution percentage applies to earnings up to 150 EUR a day.
Total Percentage 1	Enter the sum of the employee and employer percentages.
Total Franchise 1, Total Minimum 1, Total Maximum 1	Enter the total franchise, minimum, and maximum.

Insurance Premium 2

Use this group box to define the second contribution percentages for those insurance codes with two percentages for different earnings bands.

Employee Percentage 2	Enter the second employee's contribution percentage for the insurance.
Employee Minimum 2 and Employee Maximum 2	Enter the earning band for the contribution percentage that you entered in the Employee Percentage 2 field. The minimum and maximum amounts represent earnings for the period defined in the Frequency field.
Total Percentage 2	Enter the sum of the employee and employer percentages.
Total Franchise 2, Total Minimum 2, Total Maximum 2	Enter the total franchise, minimum, and maximum.

Defining Social Insurance Groups

Access the Insurance Group NLD page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Social Security/Insurance, Insurance Group NLD, Insurance Group NLD).

Insurance Type

Select the insurance type. Options are Social and Additional.

Sector Code

Select the sector code for the insurance group. Define sector codes on the Sector and Risk Group NLD page.

Risk Code

Select the risk code for the insurance group. The valid risk codes are those defined for the sector code that you have selected.

See Setting Up Sector Codes and Risk Groups.

Insurance Group Members

Insurance Code	Select from the codes defined in the Insurance Code NLD page. The system displays only insurance codes that correspond to the type in the Insurance Type field.
Insurance Number	Select the insurance number that applies to the insurance group. Each insurance code can have multiple insurance numbers. You can also define different contribution percentages for one insurance code.
Order Number	Use this field to define the order in which insurance codes are listed on the EE Additional Insurance NLD (employee additional insurance for the Netherlands) page.

See Entering Payee Insurance Data.

Defining Social Security Information for Establishments

Access the Establishment Table NLD page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Establishment Table NLD, Establishment Table NLD).

Social Security Number

Enter the establishment's social security number. This is the identification number that the social security office issues for the establishment.

Social Insurance Group

Select the insurance group for the establishment. The system displays the insurance groups defined on the Insurance Group page that have the insurance type Social.

Additional Insurance Group

Select the additional insurance group for the establishment. The system displays the insurance groups defined on the Insurance Group page that have the insurance type Additional.

Base Days Social Security

Select to define how the system calculates the number of social security days in a pay period. Options are:

Calendar Days: The actual number of working days in the pay period. If the Effective Date is January 1, 2006 or later, the system sets the field to Calendar and makes it unavailable for entry.

Average Days: The average number of working days in a pay period. The system calculates this as follows: Average = Number of working days in a year / Number of pay periods in year (used for the monthly pay frequency).

Note. The Average Days option is not valid from January 1, 2006.

Cumulative Calculation Method

Select to define how the system calculates social insurance for the establishment. Options are:

Cumulative: This method is based on a calculation starting January 1 each year. Each time you run the payroll process, the system calculates the total base for social security for the year to date, and the total contribution for the year to date. The system calculates the contribution for the payroll period as follows: Contribution for current payroll period = Total contribution – Total contribution from previous period. If the Effective Date is January 1, 2006 or later, the system sets the field to Cumulative and makes it unavailable for entry.

Non Cumulative: This method calculates the contribution for every pay period based on the number of days in the period.

Note. The Non Cumulative option is not valid from January 1, 2006.

When you run the last payroll of the year, the system recalculates the total contribution using the Cumulative method and the difference is deducted or paid back to the employee.

Continuous Payment % (continuous payment percentage)

Enter the percentage of regular earnings paid to employees who are sick. Typically, the establishment's collective labor agreement defines this percentage. The system uses the earning SALARIS CONT to replace the regular earnings SALARIS or UURLOON.

Waiting Days

Enter the number of sick days before the continuous payment is paid, up to a maximum of two days.

Waiting Days %

Enter the percentage of salary paid to sick employees for the waiting days.

Payment % 2nd Year

Enter the percentage of salary paid to sick employees during the second year of disability.

Vacation Period and Vacation Unit

Enter the vacation entitlement (in days or hours) for employees in the establishment, and select Day(s) or Hour(s) in the Vacation Unit field.

Reduced Period and Reduced Work Unit

Enter the reduced period (in days or hours) to which employees are entitled, and select Day(s) or Hour(s) in the Reduced Work Unit field.

Collective Agreement Code

Enter the agreement code for the establishment provided by the Central Bureau of Statistics (CBS). The system passes the CBS Collective Agreement Code (CAO code) to wage declaration. This is where CBS receives it's data from.

Sector Code	Enter the social security sector code.
Risk Code	Enter the risk codes that are associated with the sector code.

Insurance Type	Select the insurance type. Options are Social and Additional.
Sector Code	Select the sector code for the insurance group. Define sector codes on the Sector and Risk Group NLD page.
Risk Code	Select the risk code for the insurance group. The valid risk codes are those defined for the sector code that you have selected.

Social Security Number	Enter the establishment's social security number. This is the identification number that the social security office issues for the establishment.
Social Insurance Group	Select the insurance group for the establishment. The system displays the insurance groups defined on the Insurance Group page that have the insurance type Social.
Additional Insurance Group	Select the additional insurance group for the establishment. The system displays the insurance groups defined on the Insurance Group page that have the insurance type Additional.
Base Days Social Security	Select to define how the system calculates the number of social security days in a pay period. Options are: Calendar Days: The actual number of working days in the pay period. If the Effective Date is January 1, 2006 or later, the system sets the field to Calendar and makes it unavailable for entry. Average Days: The average number of working days in a pay period. The system calculates this as follows: Average = Number of working days in a year / Number of pay periods in year (used for the monthly pay frequency). Note. The Average Days option is not valid from January 1, 2006.
Cumulative Calculation Method	Select to define how the system calculates social insurance for the establishment. Options are: Cumulative: This method is based on a calculation starting January 1 each year. Each time you run the payroll process, the system calculates the total base for social security for the year to date, and the total contribution for the year to date. The system calculates the contribution for the payroll period as follows: Contribution for current payroll period = Total contribution – Total contribution from previous period. If the Effective Date is January 1, 2006 or later, the system sets the field to Cumulative and makes it unavailable for entry. Non Cumulative: This method calculates the contribution for every pay period based on the number of days in the period. Note. The Non Cumulative option is not valid from January 1, 2006. When you run the last payroll of the year, the system recalculates the total contribution using the Cumulative method and the difference is deducted or paid back to the employee.
Continuous Payment % (continuous payment percentage)	Enter the percentage of regular earnings paid to employees who are sick. Typically, the establishment's collective labor agreement defines this percentage. The system uses the earning SALARIS CONT to replace the regular earnings SALARIS or UURLOON.
Waiting Days	Enter the number of sick days before the continuous payment is paid, up to a maximum of two days.
Waiting Days %	Enter the percentage of salary paid to sick employees for the waiting days.
Payment % 2nd Year	Enter the percentage of salary paid to sick employees during the second year of disability.
Vacation Period and Vacation Unit	Enter the vacation entitlement (in days or hours) for employees in the establishment, and select Day(s) or Hour(s) in the Vacation Unit field.
Reduced Period and Reduced Work Unit	Enter the reduced period (in days or hours) to which employees are entitled, and select Day(s) or Hour(s) in the Reduced Work Unit field.
Collective Agreement Code	Enter the agreement code for the establishment provided by the Central Bureau of Statistics (CBS). The system passes the CBS Collective Agreement Code (CAO code) to wage declaration. This is where CBS receives it's data from.