2019 compliance update now available!
The 2019 compliance update is now available (AccountEdge Pro and Network Edition v18.5). This update contains the tax tables which need to be used when processing pays from 1 July 2019. For more information see Installing and upgrading to the latest AccountEdge.
The PAYG tax tables are used to calculate the correct amount of PAYG tax on employee pays. This support note answers some of the common questions about the tax tables in AccountEdge and some of the things which can affect the tax calculation.
The latest tax tables are included with the annual compliance update which is released in late June each year.
For more information on MYOB end of financial year training options, visit myob.com.au/training.
To confirm you're using the latest tax tables, go to the Setup menu and choose General Payroll Information. The Tax Table Revision Date should be 01/07/2019 (these tax tables can be used for pays processed between 01/07/2019 and 30/06/2020).
The Tax Table Revision Date indicates the start of your payroll year, and the tax tables should only be used for processing pays on or after that date. For example, you need to finalise all pays up to 30 June before loading and using the new tax tables.
If your Tax Table Revision Date is earlier than the example shown above, you're either not using the latest AccountEdge version or you haven't loaded the tax tables as described below.
After you have completed all pays up to 30 June and installed the compliance update, you can load the new tax tables.
- Go to the Setup menu and choose Load Payroll Tax Tables. The Load Tax Tables window is displayed.
- Click Load Tax Tables.
Check the following settings:
Pay Frequency: Is the correct pay frequency selected on the employee's card, for example weekly, fortnightly or other basis?
To check this:
- Go to the Card File command centre and click Card List.
- Click the Employee tab and click the zoom arrow next to the employee in question.
- Click the Payroll Details tab and then click Wages on the left.
- Highlighted below is the Pay Frequency field. Make sure the appropriate frequency is selected. See our example below.
Wages: Is the Annual Salary or Hourly Rate correct?
Tax Table: What tax table has the employee nominated and has the correct tax scale been selected on their card? A common mistake is choosing the wrong tax table. For clarification about which tax table should be used for an employee, check with the ATO.
To check which tax table that has been selected for the employee:
- Within the Payroll Details tab click Taxes.
- The selected Tax Table is displayed as shown below.
- Make sure any Extra Tax or Total Rebates have been entered correctly if applicable. Extra Tax is a per pay period figure and can be a positive figure (to increase the tax deducted for an employee each pay), or a negative figure (to decrease the tax deducted for an employee each pay). Total Rebates figure reduces taxes and needs to be entered as a yearly figure. See our example below.
Pay Employee Transactions: Have you manually changed any amounts in the pay employee screen? Remember: deductions, salary sacrifice and even PAYG are usually entered as negative dollar amounts.
- Go to the Setup menu and choose General Payroll Information.
- Take note of the Round Net Pay Down to a Multiple of setting. Any cents which are rounded from the net pay, will be added to the PAYG Withholding, so it's important to be aware of this setting if you're seeing an unusual tax amount.
The various payroll categories you use to pay your employees can be taxed or exempted from the PAYG tax calculation. You may need to check if a category has been exempted incorrectly.
To do this:
- Go to the Payroll command centre and click Payroll Categories.
- Click the Wages tab then click the zoom arrow next to the category you wish to check.
- Click Exempt. The Wages Exemption window is displayed.
- Check if PAYG Withholding has been selected (ticked). If so, then tax will not be calculated on amounts paid using this category. If PAYG Withholding has not been selected, then the wage category will be taxed. Select or deselect as appropriate by clicking next to PAYG Withholding as shown in our example below.
PAYG figures produced by the software are calculated using the Statement of Formulae for Calculating Income Tax Installments as supplied by the Withholdings & Indirect Taxes Operations Support of the Australian Tax Office effective for payments made after the 1st of July.
When comparing any PAYG amounts that the software calculates, the tables and formulae provided by the Withholdings & Indirect Taxes Operations Support must be used.
To see the formula used by your software to calculate PAYG on a standard weekly pay
- Go to the Lists menu and choose Payroll Categories then choose Taxes.
- Click the zoom arrow next to the PAYG Withholding category. The Tax Table Information window appears. This window shows the formula used by your software to calculate PAYG Withholding tax for a selected tax table.
- Select a tax table using the dropdown arrow. The example below shows the scales used to calculate PAYG Withholding for employees assigned the Tax Free Threshold tax table. Note: The figures below DO NOT relate to the current payroll year and should not be used for PAYG Withholding calculations. This image is provided as an example only.
If the figures the software is calculating appear to be incorrect, you can check the figures against what the ATO calculate the tax to be. This can be checked on the ATO website, which provides a Tax Withheld Calculator.
Follow the instructions provided for the use of this calculator. You will be prompted to provide certain details and once this is done it will calculate the tax figure. If the software calculates something different from this figure, check the items mentioned above to make sure the software is set up correctly.
The current tax tables contain the following abbreviations:
HELP=Higher Education Loan Program
FS=Financial Supplement (also known as Student Financial Supplement Scheme)
For more information about the tax tables, visit the ATO website at ato.gov.au/Rates/Tax-tables