I am having a hard time understanding the option “Deduct Full Tax on Selected Payroll Date” in the salary component. I have read the definition of the documentation which is
If checked and the component is used in Additional Salary, the tax amount applicable on the additional amount will be deducted on the specific payroll month. If not checked, the tax will be distributed over the remaining months of the payroll period. For example, if a bonus is given in a particular month using Additional Salary, then you can deduct full tax amount in the same month only.
but this does not help my understanding. From my point of view, a payroll period is monthly so the option would have no effect.
Could someone give me an example in which situations this option produces different outputs?