Sometimes a Client will deduct expenses prior to payment. For example, if your Client is a recruiter and you have an insurance policy with them, this expense will be deducted prior to payment.
Prior Deductions are not the same as Withholding Tax as this is a percentage of your income that a Client deducts for tax, prior to paying you. For more information, please see here: Withholding Tax and IR330C Forms
N.B. If your Client deducts expenses prior to payment as well as Withholding Tax, you need to provide this information so that we can calculate your taxable income correctly.
How to add Prior Deductions if your Client also deducts Withholding Tax:
- Click the "Clients" tab in the App sidebar to update or create a new client.
- From the following boxes, click the one that most applies to you. Each box will prompt you to specify more information on that particular client:
- Select “Yes” to show your client deducts tax prior to payment and then tick the “client deducts expenses prior to payment” checkbox.
Make sure to raise these expenses in the “Expenses” tab in the App (using your remittance as the receipt) in order to get the income tax relief.