How does the tax expense get generated?

StephenP

I had used the app on my iPad to run a payroll for me as the sole employee - that's all that I use the app for 4 times a year. Up until my February 2022 run it automatically calculated a tax expense but since then it hasn't.

While I have paid the correct amount of withholding tax to the ATO it has not been recorded. Does anyone know what I am doing wrong? I have confirmed that my tax scale is "Scale 1: Tax free threshold not claimed"

Rav

Hi @StephenP

Are you using a custom earning item in your pay runs? If so, has that custom item been created as a tax applicable earning item?

The reason I ask is, only earning items that are tax applicable (and have been created as such) will calculate tax in a pay run and subsequently report that as part of your STP submissions.

You'll be able to check this by going to Settings ➡ Earning Items ➡ Select the relevant earnings item ➡ Edit

If the tax calculation method is set to 'Tax Free' then this earning item will not calculate tax on earnings when used in a pay run.