Understanding Deductions

This chapter discusses:

• Deductions in the Netherlands.

• Delivered deduction elements.

Deductions in the Netherlands

This section discusses:

• Savings plans.

• Company cars.

• Union contributions.

• Loans, salary advances, and garnishments.

Note. All of these deductions are set up in the Deduction component (GP_DEDUCTION) in Global Payroll. Setting up the Deduction component is discussed in PeopleSoft Enterprise Global Payroll 9.1 PeopleBook.

See Defining Earning and Deduction Elements.

In addition to these deductions, social security premiums and taxes are also deducted from an employee's earnings.

See Also

Tracking and Reporting Employee Social Security Contributions

Withholding and Reporting Taxes

Savings Plans

In the Netherlands, employees can contribute to one of these savings plans:

• Save-as-you-earn (Spaarloonregeling) savings plans.

  There is a maximum contribution amount per year that changes every year. For 2006, the maximum is 613 EUR.

• Life Cycle (Levensloopregeling) savings plans.

  Life cycle savings enable employees to create a fund that they use, for example, during parental leave, or unpaid leave, or for an early retirement.

Employees can contribute to one type of savings plan only during one fiscal year. In many companies, an employee can have the contribution deducted every pay period or once a year. For example, an employee can designate that the holiday allowance or 13th month allowance go into a savings plan.

The setup of the deductions is based on amount values that you can enter at the payee level with positive input or recurring deduction assignments. Save-as-you-earn savings are deducted from the gross base.

Note. You can use the deduction recipient feature in Global Payroll to direct the deduction to the appropriate bank account. Setting up and assigning deduction recipients is discussed in the banking chapter of PeopleSoft Enterprise Global Payroll 9.1 PeopleBook.

Global Payroll for the Netherlands delivers a separate deduction element for each type of savings plan. For each savings plan, there is also a delivered accumulator, which the system uses to keep track of year-to-date savings plan balances. Delivered deduction elements and accumulators are listed later in this chapter.

Note. Global Payroll for the Netherlands also delivers deductions for the premium savings (Premierspaarregeling)and profit-sharing (Winstdeling regeling) plans that were abolished as of January 1, 2003.

See Also

Withholding and Reporting Taxes

Defining Banking Instructions

Company Cars

Often companies offer their employees, such as salespeople and consultants, the use of a company car. From January 1, 2006 the private use of a company car is a taxable benefit.

Global Payroll for the Netherlands provides a company car deduction, INHD AUTO, to track the amount deducted for the private use of a company car. The deduction is taken from the employee's net income. This deduction should be accompanied by the earning LEASE BEDRAG that tracks the amount added to employees' earnings for private use of a company car

Use the Travel Data field on the Maintain Tax Data NLD page to indicate that an employee has a company car.

Review the INHD AUTO deduction and modify it or create a new deduction to suit your organizational requirements.

See Also

Delivered Deduction Elements

Company Cars

Union Contributions

Some Dutch companies deduct union contributions from an employee's salary. Typically, a flat amount is deducted and transmitted to the union's bank account.

Global Payroll delivers union contributions as a flat amount, which you can override at the payee level—either as a one-time deduction or a recurring deduction. The deduction is taken from an employee's net income. When you set up the deduction, you can specify the recipient. For the union contribution, you can use the Deduction Recipient page in the Deduction component (GP_DEDUCTION) to direct the deduction for each payee to the same recipient.

Global Payroll for the Netherlands delivers a deduction element for union contributions.

See Also

Delivered Deduction Elements

Defining Earning and Deduction Elements

Loans, Salary Advances, and Garnishments

Global Payroll for the Netherlands handles repayment for loans, salary advances, and garnishments in a similar way.

You enter all three types of deductions as fixed amounts. You can either enter a one-time deduction or a recurring deduction at the payee level. All three deductions are taken from an employee's net income, after tax and social security calculations.

For garnishments, you can use the deduction recipient feature to direct the deduction to the appropriate recipient.

Global Payroll for the Netherlands delivers deduction elements for loans, salary advances, and garnishments.

See Also

Defining Banking Instructions

Delivered Deduction Elements

Delivered Deduction Elements

This section discusses:

• Delivered deductions.

• Delivered deduction accumulators.

• Process lists and sections.

• Viewing delivered elements.

Delivered Deductions

This table lists the delivered deduction elements for the Netherlands:

Note. The WINSTDELING (Profit-sharing savings) and PREMIE SPAAR (Premium savings) deductions are no longer used because these saving plans were abolished on January 1, 2003. As of January 1, 2006, the INHD ZKV (private health insurance) deduction was replaced by the INHD ZVW deduction that tracks employee contributions to ZVW health insurance.

See Also

Delivered Social Security Deductions

Social Insurance

Delivered Deduction Accumulators

This table lists the delivered accumulators that are used with each type of savings plan:

Process Lists and Sections

This table lists the main process list that the system uses to calculate deduction elements in the Netherlands:

This table lists the main sections that the system uses to calculate deduction elements in the Netherlands:

Viewing Delivered Elements

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

See Also

Understanding How to View Delivered Elements