Long Service Leave

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Sharon Letton
Sharon Letton Member Posts: 15 ✭
in Reckon Accounts (Desktop)

I have an employee who would like to take 150 hours of his long service leave as a lump sum payment

Will my Reckon Accounts Plus 2020 calculate the correct amount of tax to deduct or do I need to do something differently?

I have never had an employee reach long service leave entitlements before

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  • Acctd4
    Acctd4 Accredited Partner Posts: 3,426 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited November 2020
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    RA calculates PAYG tax using the ATO's standard pay frequency (eg weekly, fortnightly, monthly) tax tables in conjunction with the "Federal Taxes" section of the employee's record (including the tax code selected here) & the Pay Frequency/pay period. 

    It is unable to automatically calculate the tax for scenarios outside of this so some people prefer to calculate the tax manually & just edit the PAYG tax payroll item amount on the pay. 

    Personally - as the system tends to over-calculate rather than under - I just go with the RA calculation as the employee will get any additional tax that they're owed back when they do their tax return.   

    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

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    (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!)
  • Kris_Williams
    Kris_Williams Member Posts: 3,303 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
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    If you don’t want to overtax him, or he has an issue with it, this is what I would do.

    Get the gross figure for the leave and divide it by 52. Add this amount to an ordinary pay an see how much extra the tax works out. Multiply the extra tax by 52 and use this amount

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