How to Include Severance Pay and PPH 21 Final Tax in Comprehensive Payroll Reports

In cases where severance payments are part of a regular payroll cycle, it’s important to integrate both Severance Pay and PPH 21 Final Tax into the same comprehensive payroll report. This feature enables you to activate severance handling at the payroll configuration stage, select finalised tax groups, and merge severance details directly into the employee payment data. This way, all compensation components—including severance allowances and their tax deductions—are processed and disbursed together.

Follow the steps below to include severance components in a unified payroll report with clear tracking and reporting throughout the payroll process.

Once merged and finalized, Severance Pay will be recorded as an allowance, while Severance Tax will be reflected as a deduction, both clearly displayed in payroll results and on the employee’s payslip with tax rate notes. This ensures full transparency and compliance in severance handling without requiring a separate payroll report. By incorporating these elements into a single process, your payroll team can streamline operations and maintain accuracy across all compensation components.