What does 'Average will be included in annual income' in Aruban wage codes mean?
Wage codes with this characteristic usually have a variable character, but are applied periodically and several times a year. For example, payroll codes such as commission and overtime.
If such a wage code is applied in Celery, Celery calculates an average up to and including the current period and uses that average for the not yet processed future periods of the current year in the calculation/conversion of the full annual taxable wage.
A consequence of this is that after each payment the annual wage does not increase, as a result of which the Wage Tax due on an annual basis would otherwise also increase after each payment. Because if that were the case, the employee would have less and less net pay over the course of the year and it could even occur that, for example, because of a high commission in December, this payment is fully deducted as additional wage tax due on an annual basis.
This is undesirable and Celery therefore includes an average of these wage codes in the calculation of the annual wage, so that the wage tax on such variable benefits is neatly divided and deducted over the period of 12 months per year.