Wage code 20: Gross wage adjustment
Gross wages are regularly adjusted with retroactive effect, for instance in April effective from 1 January. In that case, supplementary payment of the gross wages is required.
However – if applicable – pension premiums, vacation allowance and 13th month are also payable over that supplementary part of the wages.
By entering supplementary payments in wage code 20 this payment will be once-only included in the basis for pension premium, vacation allowance and 13th month.
This way, in addition to paying this supplementary part, these items will be once-only adjusted and will show the proper amounts due.
For this once-only supplementary payment the Extra earnings tax table is applicable for the Wage Tax calculation. For such payments, occurring once a year, there is a statutory requirement for the Extra earnings tax table to be applied.
No SVB ZV/OV premiums are calculated for this supplementary payment.
That is not necessary, because the SVB legislation indicates that it does not accept wage adjustments with retroactive effect. Therefore, the raise will only be applicable from the month in which it is first included in payroll processing. Seeing the legislation there are no ZV/OV premiums due for wages in arrears.