Wage code 20: Gross wage adjustment
Use wage code 20 when you give an employee a raise that counts from an earlier date. It pays the extra money once. It also makes sure pension, vacation allowance and 13th month are updated correctly.
When do you use it?
Sometimes a raise counts from an earlier date. This is called "retroactive" (backdated).
Example: In April, you agree on a raise that counts from 1 January. The employee is now owed extra pay for January, February and March. You pay this back pay in April.
Why use wage code 20?
The back pay also affects other things the employee is owed, if they apply:
- Pension premiums
- Vacation allowance
- 13th month
When you enter the back pay in wage code 20, Celery adds it once to the calculation for these items. This way:
- The employee gets the extra pay.
- Pension, vacation allowance and 13th month are updated once.
- All amounts are correct.
How is the tax calculated?
Celery uses the Extra earnings tax table for this payment. This is a special tax table for one-off payments. The law requires this table for payments like this, which happen once a year.
What about SVB and SZV premiums? (Curaçao and St. Maarten)
Celery does not calculate SVB or SZV premiums for health insurance (ZV) and accident insurance (OV) on this back pay. That's correct.
The reason:
- SVB (Curaçao) and SZV (St. Maarten) do not accept backdated wage changes.
- For them, the raise only counts from the month you first pay it.
- So no ZV/OV premiums are due on back pay.
Example: You pay the raise for the first time in April. The SVB/SZV premiums are only calculated on the new salary from April onwards.