--- title: Pre-Annualized Tax Computation --- [Skip to content](https://guide.sprout.ph/pre-annualized-tax-computation#main-content) [![Sprout Logo-3](https://guide.sprout.ph/hs-fs/hubfs/Sprout%20Logo-3.png?width=200&height=78&name=Sprout%20Logo-3.png)](https://guide.sprout.ph/?hsLang=en) Open main navigation Close main navigation How can we help you? - There are no suggestions because the search field is empty. 1. [Sprout](https://guide.sprout.ph/?hsLang=en) 2. [Sprout Payroll](https://guide.sprout.ph/sprout-payroll?hsLang=en) 3. [Tax Computation](https://guide.sprout.ph/sprout-payroll?hsLang=en#tax-computation) # Pre-Annualized Tax Computation ![](https://guide.sprout.ph/hubfs/Rich%20Text%20Pasting/google-1746165237511.png) Pre-Annualized Tax Computation works by forecasting an employee’s income for future runs until the end of the year. Then, based on the annual tax table, we divide the annual tax due by the remaining payouts. This will result in evenly distributed taxes throughout the entire year. Meanwhile, variables such as absences, undertime, one-time bonuses, and deductions will only be taxed on the period when they are earned or deducted. To use Sprout’s *Pre-Annualized Tax Computation*, simply follow these steps:   1\. Go to Setup \> Company \> Profile ![](https://guide.sprout.ph/hubfs/Rich%20Text%20Pasting/google-1746165237511-May-02-2025-05-54-00-4717-AM.png) **![](https://guide.sprout.ph/hs-fs/hubfs/image-png-Jul-03-2025-01-38-53-7317-AM.png?width=670&height=95&name=image-png-Jul-03-2025-01-38-53-7317-AM.png)** 2\. In your *Company Profile*, scroll down to the *Tax Computation* section. Then, for the *Tax Table* setting, choose *“Pre-Annualized”.* ![](https://guide.sprout.ph/hs-fs/hubfs/Rich%20Text%20Pasting/google-1746165237511-May-02-2025-05-53-59-7823-AM.png?width=612&height=298&name=google-1746165237511-May-02-2025-05-53-59-7823-AM.png)   3\. Select which month you prefer this type of computation to start. You can begin as early as January, in the middle of the year, or whenever your company prefers. *Please note that for months before the selected start of Pre-Annualized Tax Computation, the Normal Tax Table (monthly, semi-monthly, etc.) will be used. This is set in the “Periods per Month” portion in your Company Profile.* ![](https://guide.sprout.ph/hs-fs/hubfs/Rich%20Text%20Pasting/google-1746165237511-1.png?width=621&height=297&name=google-1746165237511-1.png)   4\. Check the box that indicates*“Include 13th month pay”*if you want to include it in your employees’ forecasted salary for the year. ![](https://guide.sprout.ph/hs-fs/hubfs/Rich%20Text%20Pasting/google-1746165237511-2.png?width=621&height=292&name=google-1746165237511-2.png) 5\. After finishing the setup, hit the*“Save”*button at the bottom part of the page. ![](https://guide.sprout.ph/hs-fs/hubfs/Rich%20Text%20Pasting/google-1746165237511-1.png?width=456&height=82&name=google-1746165237511-1.png) 6\. Once you create a payroll run starting on the month you selected for *Pre-Annualized Tax Computation*, you will see in the Tax Table portion that you are in that computation mode. It will also indicate if you chose to include the 13th Month Pay in the total yearly income. ![](https://guide.sprout.ph/hs-fs/hubfs/Rich%20Text%20Pasting/google-1746165237511.png?width=609&height=301&name=google-1746165237511.png) 7\. After saving the payroll run, you can validate the tax deducted to employees by downloading thePre-Annualization Reportin the *Download Reports* section of the Summary Page. 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