Tax Configuration - Australia

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Use this tab to define the transaction types and/or transaction type groups that are to be used in the calculation or reporting of statutory requirements.

ETP amounts

Use this form to select the transaction types that are used for ETP payments and taxation when terminating an employee.

Note: For more information about ETP payments, consult your accountant or the Australian Taxation Office.

Default Transaction Types

Payroll tax

Set up:

1. Employer Cost Transaction Types for each payroll tax required by your business. You must select the Include in Payroll Tax Report option and enter the annual deduction amount and rate against the transaction type.
2. One payroll tax transaction type for each State where payroll tax is paid is required. You can also establish an exempt payroll tax transaction type for employees whose earnings do not attract payroll tax.
3. Apply the payroll tax transaction type against each employee on the Employee Maintenance > Tax Configuration form.

When the payroll tax report runs it will:

• Collect the values of the transaction types listed in the accumulator using the payment date, attached to the payroll tax transaction type, for each employee the payroll transaction type is assigned to. This is the gross taxable wages.
• Apply the proportion (depending on the date range that is selected) of the deduction against the gross wages calculated above. This will provide the taxable wages.
• Multiply the taxable wages by the percentage rate that is entered against the payroll tax transaction type to calculate the tax payable.

The report will calculate the tax payable for all the payroll transaction types that have been established. If your business does not require payroll tax calculation these options can be ignored.

SGC min/max check

This is the default transaction type that is added to each new employee created in Greentree Desktop. This function is detailed on the Super tab of Module Control. To use this, you would must have only one SGC transaction type for each employee, and then set the authority for the transaction type on the default employer cost line per employee.

Taxation of Unused Leave

This section is for selecting the tax transaction types are used for calculating tax on some leave on termination.

Normal Gross Earnings

The Normal Gross Earnings is used for the calculation of taxation on unused leave on the Create Final Pay on termination. This is also used to calculate tax on bonuses paid and on some back payments. The accumulator and basis for the Normal Gross Earnings calculation is set here. The Last Pay option uses the normal gross earnings to the pay transaction types that are included in the accumulator that is selected for the last non future dated paid pay (excluding journals).

If you change the option to Average for year, you will get the average for the last financial year. This is used when the pay fluctuates significantly over a number of pay periods.

This option is set on Module Control, but can be overridden at an employee level to handle employees whose pay fluctuates over a number of pay periods, but when you don't want this set as the default.

The accumulator used for the calculation of Normal gross earnings should include all payments, except those relating to termination payments, received in the last full period of employment (this includes taxable allowances, overtime, bonuses and the like). A payee's normal gross earnings are those earnings relating to the last full pay period worked.

Schedule 30 PAYG Withholding

The Schedule 30 section allows the specification of the withholding cap. This special taxation is used for taxing back payments, commissions, bonuses and similar payments.

Taxable component

Select the transaction type for the Taxable component as defined by the Australian Tax Office.

Note this is a pay transaction type that must have a calculation method of Amount.

Tax free component

Select the transaction type for the Tax free component as defined by the Australian Tax Office.

Note: This is a pay transaction type that must have a calculation method of Amount.

Tax Withheld

Select the transaction type for the tax withheld from ETP as defined by the Australian Tax Office.

Note: This is a tax transaction type that must have a calculation method of Amount.

Payroll tax

Select the default payroll tax transaction type used each time an employee is created.

SGC min/max check

Select the default SGC transaction type to use when you create an employee.

Normal Termination TT

Select the Tax transaction type for taxation of Normal terminations — for example, voluntary resignation, employment terminated due to inefficiency, retirement. This must have a calculation method of amount.

Special Termination TT

Select the Tax transaction type for taxation of Special terminations — for example, bona fide redundancy, invalidity or Approved Early Retirement Scheme. This must have a calculation method of percentage and be set to the correct percentage as specified by the Australian Taxation Office.

Accumulator

Select the accumulator that contains the transaction types that define Normal Gross Earnings.

Last Pay

Select this option to default the Normal Gross Earnings from the last non future dated paid pay for the employee.

Average for year

Select this option to default the Normal Gross Earnings from the average of all paid pays for the last financial year for the employee.

Withholding cap

Enter the withholding cap for Schedule 30 taxation.

• Terminate Employee
• Transaction Type
• Accounting in Payroll

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