Tax Entry from GL: Implementation Activity

The following activity will walk you through the process of applying the settings and configuring entities needed for tax entry from the general ledger.

Story

Suppose that starting in 01-2023, SweetLife Fruits & Jams uses external payroll software for calculating salaries. Based on the governmental laws of the country, employers need to withhold certain payroll tax amounts from salary payments and pay them to the tax authority. Acting as an implementation consultant, you need to create a withholding payroll tax and create other entities needed for that tax.

Configuration Overview

In the U100 dataset, the following configuration tasks have been performed to prepare the system for this activity to be performed:

  • On the Enable/Disable Features (CS100000) form, the VAT Reporting feature has been enabled.
  • On the Chart of Accounts (GL202500) form, the 24050 Payroll Liabilities: Taxes account has been configured.

Process Overview

In this activity, on the Tax Categories (TX205500) form, you will create a tax category for payroll taxes. On the Taxes (TX205000) form, you will create a payroll tax.

System Preparation

To prepare the system, do the following:

  1. Launch the MYOB Advanced website, and sign in to a company with the U100 dataset preloaded. You should sign in as an implementation consultant by using the gibbs username and the 123 password.
  2. On the company and branch selection menu, on the top pane of the MYOB Advanced screen, select the SweetLife Head Office and Wholesale Center branch.
  3. As a prerequisite activity, in the company to which you are signed in, be sure you have configured the VATTAX tax agency as described in Tax Agency: To Set Up a Tax Agency for VAT.
  4. As a prerequisite activity, in the company to which you are signed in, be sure you have configured a tax report and its lines as described in Withholding Taxes: Implementation Activity.

Step 1: Creating a Tax Category

To create a tax category, do the following:

  1. Open the Tax Categories (TX205500) form.
  2. On the form toolbar, click Add New Record and specify the following settings:
    • Tax Category ID: PAYROLL
    • Description: Payroll Taxes
  3. On the form toolbar, click Save.

Step 2: Creating a Payroll Tax

To create a payroll tax, do the following:

  1. Open the Taxes (TX205000) form.
  2. On the form toolbar, click Add New Record and specify the following settings on the Tax Settings tab:
    • Tax ID: PAYROLL
    • Description: Payroll tax
    • Tax Type: Withholding
    • Calculation Rule: Inclusive Line-Level
    • Cash Discount: Does Not Affect Taxable Amount
    • Tax Agency: VATTAX
  3. On the GL Accounts tab, in the Tax Payable Account box, specify 24050 - Payroll Liabilities: Taxes.
  4. On the Tax Schedule tab, click Add Row on the table toolbar, and specify the following settings:
    • Start Date: 1/1/2023
    • Tax Rate: 6.2
    • Reporting Group: Withholding
      Note: For the purposes of this activity, you are using the reporting group that has already been created, as described in Withholding Taxes: Implementation Activity. In production environment, you would need to create a special report line and reporting group for a payroll tax.
  5. On the Categories tab, click Add Row on the table toolbar, and select PAYROLL in the Tax Category column.
  6. On the form toolbar, click Save.