Payroll Tx

Kathyd

Hi, what is the difference between the State and Federal Payroll Tax in Reckon Desktop and when would either of them be ticked. We run two companies and both are over the threshold of $1,200,000.00 per year in wages. We are set up a new employee should I be ticking both the Federal and State Tax field? Looking at the other employees they are not set up for State Tax.

Acctd4

“State” refers to Payroll Tax, “Federal” refers to PAYG Tax.

Ticking State ensures the Payroll Item will be included in the Payroll Tax reports. (Check your relevant state legislation for what specific payments are/aren’t included)

NB: The majority of Payroll Items should be ticked for PAYG Tax

Kathyd

Hi we run two companies and both are over the NSW Payroll Tax threshold. When setting up an employee should we also tick State Taxes ? Looking at our employees some are ticked and some are not ( guessing it depended who was in the chair at the time and understanding what State Taxes meant). If I tick State Taxes will this automatically calculate our Payroll Tax without manually working it out.? What report do I run? I assume this will calculate at the correct state % rate?

Acctd4

Yes, they should all be ticked for this, along with the relevant state selection.

You'll find a Summary & Detail report for State Tax under your default Reports menu > Employees & Payroll.

These calculate as per the applicable state percentage, above the relevant state threshold (provided you've selected the applicable State also of course!)

Note: These reports are entirely based on your configurations, eg if you've not included a particular Payroll Item, it will also not include it on these reports & therefore will not calculate correctly!

Bruce

Not sure about NSW, but in Victoria the Payroll tax report does not always produce exactly the correct amount:

• there is usually a very small difference due to rounding; Vic payroll tax figures use whole dollars but Reckon calculates based on cents
• Vic State Government has some unusual covid based concessions - Reckon does not take these into account

Hence I treat the Payroll tax reports as a guide rather than totally rely on them. You'll need to form a view based on your circumstances

Acctd4

Yes, Bruce is correct!

I think another reason may be because the state calculator also annualises & then pro ratas, whereas the RA report calculates for a single month at a time only 😬

I personally don't use the RA reports for this, but as Bruce said, it's a useful guide tool 😊