What is a Net Pay Adjustment?
When selecting Net in the Salary type of an employee, you are choosing to pay the employee in a net amount, rather than gross. This is done when you have such an agreement with the employee, for example paying the employee €1,000 net every month.
For such agreements, Buddy will automatically add a Net Pay Top-Up in the payslip and is added to the gross so that the Net (Take-Home) Pay equals the gross amount (excluding the adjustment itself.)
How is Net Pay Adjustment Calculated?
During Payroll, when you save a payslip that is marked as Net, Buddy will automatically add the Net Pay Top-Up as a taxable allowance.
The Net Pay will reverse calculate the tax and compensate for the FSS and SSC.
Such a method allows the Basic Pay to be consistent, and thus, so would the weekly wage (for employees on fixed hours) and their weekly SSC contributions.
What about the Government Bonus?
By default, the government bonus will be paid out in gross.
In Settings > Payroll > Settings, you can enable "Government bonus as net-to-gross", which will then pay this bonus in net.
Disclaimers
The Net Pay method is designed for salaried employees on main tax rates.
The calculation may not be able to accurately estimate the taxes if the employee income is changed to net or is employed mid-year.
Employees who earn taxable overtime or are part-timers can still be calculated on net pay, but the reverse calculation may lead to inaccurate gross projections.
Sample Payslip