Taxation for 27 or 53 Periods in a Year

In some income years, employees who are paid:

• Fortnightly - Will have 27 pay days for the year instead of the usual 26
• Weekly - Will have 53 pay days for the year instead of the usual 52

The withholding tax tables published by the ATO are using the normal number of pays in a year. Tax rates increase as taxable incomes increase, therefore an additional pay day in a year will mean that the amount of tax withheld from salary and wage payments, will not cover the amount payable when an employee lodges their tax return.

If you want to have additional tax taken out:

1. Set up a tax transaction type that has a calculation method of Amount and X by weeks selected.
2. Enter this transaction type on the HR Employee Maintenance > Payroll | Tax tab for applicable employees, with a dollar value for their wage bracket. As multiply by weeks is selected, only enter one of the above amounts. When the pays are processed the system will multiply the amount by the conversion rate entered against that pay group in HR > System > Payroll > Pay Group Maintenance.