How to Pay Withholding Payments

If an employee with a standard tax code like M or M SL receives schedular payments, create a new employee record with the “WT” tax code and make schedular payments to the employee under that tax code.

NOTE: Prior to version 2019.05, you could pay a withholding payment as an allowance - this is no longer an option, as it is not compatible with payday filing.

From the File menu select Open Employee and choose the employee you want to edit.
On the Employee Details tab of the Employee Maintenance window, set the employee's Tax Code to "WT" (Withholding Tax).
A Tax Rate field appears below the Tax Code. Specify a tax rate, e.g. 17 for 17%. Withholding Payments are not liable for Earner Premium, so leave the Add Earner Levy option unticked. They do not add to the gross pay when calculating student loan entitlements, so therefore should not have a Student Loan Rate entered.
If paying GST on the withholding payment, from the Maintenance menu select Allowances to open the Allowances Maintenance window. Add a new allowance using the next free allowance code. Specify a name, e.g. "GST @ 15%". Set the Calculation Method to "Percentage of Total Gross". Make the payment non-taxable and enter the Percentage Rate of 15.
Enter Wages/Salary into the Standard or Current Pay as per usual. All amounts will be taxed at the flat withholding tax rate you specified in step 3, with a GST proportion added to it, if you also add the allowance created in step 4 into the pay.

NOTE: If you have created a new employee record to pay withholding payments to an existing employee, you will need to go through the Holiday Pay tab and Sick & Other Leave tab of the Employee Maintenance window and zero out the balances for each leave type. When a new employee record is created, its leave balances default to the legislated minimums - if these are not set to zero, the employee will effectively have double the usual entitlement, which will affect leave reporting.