Incorrect PAYE/Taxation

Points to check if PAYE is incorrect:

• Check the version number of the payroll. You will find this on the About screen (press F11). If you suspect that you are running an old version, you will need to contact MYOB for an upgrade or upgrade online. You should receive at least one upgrade whenever tax legislation changes.

• Check the Override PAYE option on the PAYE window of the Standard Pay and Current Pay; if this has been turned on then the payroll will not be able to calculate the PAYE correctly.

• Check that the pay date is correct. The payroll uses the physical payment date, not the pay period end date, to calculate taxation. This means pays dated with physical payment dates beyond the date of the last change in tax regulations may use different tax rates than those in force currently.

• Check the employee has the correct tax code. Student loan tax codes are M SL, ME SL, S SL, SB SL, SH SL, ST SL and STC.

• Check whether or not Earner Premium is turned on.

• If taxing holiday pay, check how many periods the money is being taxed over.

• Check the employee's pay frequency is correct.

• If paying withholding payments or extra pay, check that these have the correct flat tax rate assigned.

• Check the gross earnings liable for PAYE.

• Remember to use Adjust By Last Pay if correcting overpayments or underpayments in a one-off pay.

• Enter the components of the pay screen into the PAYE Calculator and compare them.

• Verify that any allowances paid should be taxable or non-taxable.

• Verify that any deductions paid should be post-tax or pre-tax.

• If paying a extra pay, in some circumstances the payroll will force the high rate of 33% instead of the low rate of 21%.

• Check whether the Current Payment, once grossed up to a year, does not exceed the maximum earnings liable for Earner Premium. The payroll will only calculate Earner Premium on the proportion of the pay which is liable for Earner Premium. It calculates this at the time of payment.

• When reversing a pay for an employee who is making voluntary Student Loan repayments using the SLBOR tax code, you may need to manually override the amount of PAYE and SLBOR on the PAYE screen.

• When reversing a pay for an employee who at one time had SLCIR activity and has since settled their SLCIR repayments, you may find that a negative transaction appears for SLCIR. To suppress this negative transaction and/or lines for negative SLCIR activity in the IR348, you can either override the PAYE/SLCIR amount to zero, or turn off the Apply SLCIR option in the SLCIR employee's setup screen, until further notice.