Paying Social Security Contributions and Tax abroad
It is not uncommon to have employees who work with you but pay Social Security (NI) Contributions and Taxes abroad.
In such cases, you can still create their profile and process payroll on Buddy, without impacting the local Tax Forms (FS3, FS5 and FS7).
How do we exclude such employees from Tax Forms?
To exclude these workers from Tax Forms, enable the following settings in their Tax Profile:
- Social Security Status: Pays Social Security in Another Country
- Tax Rate: Is not taxable in Malta
Only having these 2 settings enabled will remove those employees from the Tax Forms.
Can I Switch Employee to Paying/Non-Paying Mid-year?
It's recommended that a new profile be terminated and generated altogether.
Taxability within a year is assumed per employment, which means switching an employee to paying tax (or not paying tax) mid-year will use a shared rule for FS3 generation.
In case employee needs to have only the taxable portion reported to the FS3 and FSS system, then, make sure to terminate upon the date of change and re-hire the employee.