How to correctly set up PAYG tax witholding

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alyce alexandra
alyce alexandra Member Posts: 2
edited July 2022 in Reckon Accounts (Desktop)
I have just found out that we have been withholding too much tax from employees. The amount withheld by Reckon is larger than the amount it says to withhold on the ATO website. I have looked at previous threads and followed there instructions but it is still too much. I have the correct tax info (01/07/13), all the people who have help debts are ticked approprately and the pay frequency is correct. How can I change it to mirror the ATO withholding amount?

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  • Graham Boast
    Graham Boast Accredited Partner Posts: 331 Accredited Partner Accredited Partner
    edited December 2017
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    Hi Alyce

    This is almost certainly an issue with how the employee's superannuation item is set up.  If I enter $2185 (Gross PLUS Super) with Help debt into the ATO calculator, the calculated tax is $506 - the same amount Reckon is calculating.  This means that you are incorrectly taxing the super contribution.

    Look at this post and follow the instructions re setup of the Super item in Lists > Payroll Item List.  If there are more than one Payroll Item Type = Super, check them all.

    https://community.reckon.com.au/reckon/topics/payg_withholding_error


    If you still can't get it to work, drop me an email and I can set up a remote support session

    Graham Boast
    Reckon Accredited Consultant
    graham@reckonhelp.com.au

    Graham Boast | 0409 317366 | graham@reckonhelp.com.au

  • Mirko
    Mirko Reckon Alumni Posts: 1,256 ✭✭
    edited November 2015
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    Hey Alyce,

    Welcome to the Reckon Community and thank you for your post.

    Thanks for providing a screen shot and an outline to what you have done (very helpful!), so we know where you are at.

    The next step is to have to look at the components that make up the pay, and check that any component that shouldnt be attracting tax, in fact is incurring tax (it's common that Super contributions are incorrectly selected to incur tax when they shouldn't).

    If you cannot see the discrepancy yourself, you may need to contact technical support for 1-to-1 attention.

    Thanks,
    Mirko
  • alyce alexandra
    alyce alexandra Member Posts: 2
    edited May 2014
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    Thanks very much for your help Mirko and Graham. After going through the payroll items I found that the PAYG tax was calculated including the super amounts. I have deselected that and it is now showing correct tax amounts.

    Very much appreciated.
  • John G
    John G Reckon Staff Posts: 1,570 Reckon Staff
    edited February 2017
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    Good to hear your payroll process is where is should be, Alyce,

    cheers,
    John
  • m_ca
    m_ca Member Posts: 18
    edited July 2022
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    Hi, I am having this issue with the latest Reckon Payroll app. The Withholding Tax calculation is much higher than what the ATO calculator tool https://www.ato.gov.au/Calculators-and-tools/Tax-withheld-calculator/ says it should be. Appreciate this is an old thread, the solution link above posted by Graham Boost no longer exists and there is no option in the current app to update the superannuation list item as suggested.

    I do not have a Premium subscription for the software and am using a custom Earning Item called "SAW", which is the Income Type I understand the ATO requires us to report for normal wages in STP phase 2 (is everyone else dong that too? Let me know if I misunderstood!). The earning item is set up as a "Normal earning item" with an hourly rate - fixed salary type is not available. I have "Tax applicable" and "Include in super guarantee calculation" both ticked. There are no other options available in the item setup.

    The employee is setup as a full-time employee with a 38 hour week, so when creating the payrun I convert weekly salary to an hourly pay-rate (weekly salary / 38 hours) and then enter 38 hours and the hourly rate in the pay item for a 5 day working week.

    The weekly salary calculates correctly using the hours and pay-rate, the Super amount calculates correctly using 10.5%, it's just the withholding tax amount that is wrong. I know I can override it and manually enter the amount, but it would be good if I could exclude having to perform this step.

    Can someone please advise why the tax amount calculates could be wrong and how to fix it? if you need any more specific info on my payrun e.g. the exact amounts and amounts calculated by the app, please send me a private message. Many thanks.

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,483 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited July 2022
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    Hi @m_cantafio

    You've posted your question in the Reckon Accounts (Desktop) category which is very different to the Reckon Payroll App.

    Have a look under the Reckon Payroll App category (in case someone has asked the same question):

    https://community.reckon.com/categories/payrollapp

    or otherwise try posting your question there & you should be able to find a relevant solution ☺️

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    shaz@accounted4.com.au

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • m_ca
    m_ca Member Posts: 18
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    Ok, thanks, I will do.

This discussion has been closed.