After 01 January 2006, when an employee or director gets a company loan with a rate of interest lower than the Repo rate of interest set by the Central Bank of Trinidad & Tobago, the computed difference in interest is considered a benefit and must be added to the emolument of the employee or director, and included in the employee's total income for the current year. 

 

In order to show this benefit on the payroll

1.  Enter an allowance flagged as a TAXABLE, CASH item in the New Allowance window - ...>>Payroll>>Setup>>Allowance Types>>Allowances>>New Allowance.

2.  Click "Treat as a Regular Earning" checkbox if the allowance is not a one-off item and will be processed each cycle over a period.

3.  Enter the allowance for the employee in the Cycle Changes window.

 

The allowance does not form part of the net pay of the employee.  To ensure that it does not, its value must be deducted.

 

1.  Enter a deduction in the New Deduction Type window - ...>>Payroll>>Setup>>Deduction Types>>Deduction Types>>New Deduction Type.

2.  Click "Regular Item" checkbox if the deduction is not a one-off item and will be processed each cycle over a period.

3.  Enter the deduction for the employee in the Cycle Changes window.

 

On the employee's TD4 slip, the benefit must be recorded in section (5) Taxable Allowances (IT 76).  In order to do so, you must attach the appropriate statutory report flag to it.

 

1.  Go to ... >>Payroll>>Setup>>Statutory Report Flags>>"New" icon.

2.  Click the drop-down list icon on the right of the Report Flag field.

3.  Click TD4 (TRINIDAD)5 TAXABLE ALLOWANCES (IT 76).

4.  In the window that opens, in the Code Type field type "A"; in the Code Field type the allowance code created above; the Factor remains as 1; and the radio button “Employee Only” remains flagged.

5.  Click the "OK" button to save the record.