[yearly]

Problem

Starting 1-1-2012 a reduction in AOV/AWW premiums was introduced for low income earners (zie advertentie).

Employees with a yearly income basis for the AOV/AWW up to NAF. 6.980 are completely exempt from the employee past of the premium for the AOV/AWW. The reduction goes down to zero for a yearly income for the AOV/AWW van NAF. 27.633.

Solution

To match the reduction with the income tax Payroll 4 Curacao calculates every time you process the salary what the yearly AOV/AWW income will be. Then the yearly reduction in AOV/AWW is used to calculate the monthly reduction.

If the wages go up, for instance because of overtime, bonus, vacation money, the basis for the reduction AOV/AWW will go up and the yearly reduction will go down. It is therefor possible that the reduction can come out negative in some months.

Problem

If an employee also has other sources of income then the allowed reduction will be lower and can lead to a charge in the income tax. In this case you would rather apply less reduction.

Solution 1

Place on the "Tax" tab a check mark at "No AOV reduction".

No reduction will be applied at all.

Solution 2

Enter the amount of the other income on the "Tax" tab at "Addtion tax basis".

The AOV reduction will come out lower.

The law requires that the AOV reduction fully benefits the employee. Even if the employer pays the AOV premium in full and the employee does not contribute to the AOV premium. This may even result in a gross wage that is higher then the nett wage because of the AOV Reduction.