Statutory Arrears Recovery

Typically, employers pay the arrearage amount for the benefits and then recover them from the employees. The exception to this is the Net-to-Gross benefits where the employers cover the tax liabilities.

All arrears are automatically processed by payroll.

You need to recover the arrears by the last day of February. For example, arrears created in the tax year 2023 can be recovered until the end of February 2024.​

To manage the recovery of arrears, you can configure protected earnings and define how you want to recover the statutory arrears. You can set this in the Basic Calculation Information component on the Taxable Benefits calculation card for the employee.

When the statutory deduction calculation including Notional Pay results in a negative net pay, the respective statutory calculation increases the net pay to cover the shortfall.

The recovered amount will reduce Net, Net Pay, and Total BIK Statutory Arrears balance.