Modifying TAXABLE SP PAYMENT

13THMNTH PAY is the delivered contributing earning for the TAXABLE SP PAYMENT accumulator. You can replace 13THMNTH PAY with a different contributing earning that you want to be taxed as an annual bonus.

Note:

If you use the delivered 13THMNTH PAY earning for 13th month pay, and if you leave this earning in the TAXABLE SP PAYMENT accumulator, then 13th month pay is taxed as an annual bonus.

If 13th month pay is to be taxed as salary rather than as an annual bonus, you must modify the delivered setup so that you have a 13th month pay earning that is part of the TAXABLE NORMAL SAL accumulator and not part of the TAXABLE SP PAYMENT accumulator.  Specifically, if you continue to use the delivered 13THMNTH PAY earning for 13th month pay, you must modify the accumulator definitions.  Alternatively, you can use a different earning; the delivered VAR BONUS earning is suitable for this purpose, or you can create a new earning.