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AccountRight Plus and Premier, Australia only

The PAYG Withholding payroll category is used to calculate PAYG on employee pays, for all tax tables (or tax scales) provided by the ATO. You can view this payroll category by going to Payroll command centre > Payroll Categories > Taxes tab.

The tax tables are already set up for you, and if the government changes them, we'll make available a software update that once installed, will update the tables for you.

How PAYG is calculated

You don't need to worry about this bit, but if you interested, here's how PAYG is calculated using the amounts shown in the PAYG Withholding category:

PAYG withholdings = (Weekly wage amount x a) - b

For example, using the values shown in the screenshot above, a weekly wage of $500 would be calculated as follows:

Weekly wage = $500
"a" coefficient = 0.3477
"b" coefficient = 43.69

so, ($500 x 0.3477) - 43.69 = $130.16

Note that when processing a pay using this example, the PAYG amount will be rounded to $131.00, or it might be different by a few cents if you've chosen to round the net pay (Setup menu > General Payroll Information).

The tax table information is set by the ATO. So, if you have any queries, please ask the ATO (or use their Tax Withheld Calculator).

Set up the PAYG Withholding tax category

The only thing you can set up for this category is the Linked Payables Account. This is the account that will help you track the amount of PAYG that is withheld from employee pays. You shouldn't need to change this account, unless you really don't want to use the default one we suggested for you.

Set up your employees

For each employee, you need to specify which tax scale applies to them. You do this in the Payroll Details > Taxes view of their card.

<h2><i class="fa fa-comments"></i>&nbsp;&nbsp;FAQs</h2><br>

How do I handle PAYG Withholding Variations?

If an employee requires PAYG to be deducted at a flat rate (previously known as a 221D Variation), for example 20%, you need to assign the Withholding Variation tax table to the employee's card.

1. Open the Card File and edit the employee's card.
2. Select the Payroll Details tab.
3. Select the Taxes tab.
4. Select the Withholding Variation tax table.
5. Enter the rate in the Withholding Variation Rate field.
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How do I deduct extra PAYG for an employee?

If an employee requires a fixed amount of PAYG to be deducted each pay period, you can enter the deduction amount on the employee's card.

1. Open the Card File and edit the employee's card.
2. Select the Payroll Details tab.
3. Select the Taxes tab.
4. Enter the PAYG deduction amount in the Extra Tax field.
   

What is a tax rebate?

If an employee is claiming a tax rebate, you can enter the annual rebate value in the Total Rebates field of their employee card.

Amounts entered in this field reduce the tax payable over the year in instalments based on the employee’s pay frequency. For example, if the employee is paid monthly, 1/12th of the rebate is applied to each pay.