Regular Earnings

Regular income is the amount paid to the employee during a sequence period. The assessable income, used for tax calculations, is estimated by projecting the regular income for the entire year.

Global Payroll for Thailand enables you to choose between the Calculation in Advance Method (CAM) for tax calculation and the Accumulative Calculation Method (ACM).

The system calculates the projected annual income when you use the CAM tax calculation by:

  • Multiplying the monthly rate by 12.

  • Multiplying the semi-monthly rate by 24.

  • Multiplying the weekly rate by 52.

The system calculates the projected annual income when you use the ACM tax calculation by adding the year-to-date regular earnings income to the projected regular earnings income for the remaining calculation periods.

PeopleSoft Global Payroll for Thailand supports the following categories of assessable income, according to Section 40 of the Revenue Code in Thailand:

  • Income under section 40(1).

    This is income derived from personal services rendered to employers, or employment income.

  • Income under section 40(2).

    This is income derived by virtue of a post, office of employment, or service rendered. For example, fees, commissions, discounts, meeting allowances, gratuities, bonuses, and so on.

Global Payroll for Thailand delivers the following regular earnings elements:

  • Basic Salary (SAL BAS EARN).

  • Section 40(2) regular income (402 ER REG).

If you need to create new earnings elements for income under section 40(1), use the SAL BAS EARN earnings element as a template. If you need to create new earnings elements for income under section 40(2), then use the 402 ER REG earnings element as a template for your new elements.

The basic salary earnings element, SAL BAS EARN, is a flat amount earnings element that is only paid at the earnings level. Basic salary is paid regularly for permanent employees, in the first period for new hires, and in the last period for terminated employees.

The calculation rule is an amount rate code supporting the KTBS01 element - the payee's monthly compensation rate.

SAL BAS EARN supports proration based on calendar day by proration element GP PRORATE CAL DAY whenever there is a partial period or when a pay rate change occurs during the pay period.

SAL BAS EARN supports forwarding retroactive processing, the delta amount is forwarded to another earnings element, SAL RTO DELTA; this earnings is treated as irregular income. The tax calculation method of the irregular income is the same as the tax calculation method for SAL BAS EARN in the period being processed retroactively.

Section 40(2) regular income (402 ER REG) is an earnings element that is calculated in the same way as basic salary, or income under section 40(1). Only the tax category, such as 40(1) or 40(2), is reported in a different category.

If there is section 40(1) and section 40(2) income in the same period, the tax calculation is calculated sequentially, with section 40(1) income calculated first, and section 40(2) income calculated second.

The tax calculation sequence is:

  1. Regular 40(1) income.

  2. Regular 40(2) income.

  3. Irregular 40(1) income.

  4. Irregular 40(2) income.

Any step in this sequence can be skipped, if there is no income in that category for the current period.

Income under section 40(2) can have the following tax calculation methods:

  • Withholding tax.

  • Gross up one.

  • Gross up all.

Note: During a single payroll period, both section 40(1) and section 40(2) regular income can be processed by a specific tax calculation method. However, you can use a different tax calculation method for subsequent payroll periods. For example, assume your payroll is processed every month, and in January all regular incomes are processed using the withholding tax calculation method. Then, in February, you can change the tax calculation for all regular incomes to the gross up all tax calculation method. You can handle this by overriding the TAX VR CAL METHOD variable on the Earnings - Supporting Elements Override page.