Child Support Payments as a percentage of Dollar

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Liza Oates
Liza Oates Member Posts: 70 ✭✭

Good Afternoon

I have been requested by Services Australia to set up a payment for $0.24 in every dollar instead of a fixed amount.

I have been advised on the total debt amount.

No protected earnings has been provided.

Can someone tell me if it is possible for RECKON Accounts Hosted to do this automatically or do I have to calculate this manually?

In addition, can you advise how I add the payment reference number for STP as well.


Thank you

Liza

Best Answers

  • Rav
    Rav Administrator, Reckon Staff Posts: 16,008 Community Manager Community Manager
    Answer βœ“
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    Incredible work Shaz! πŸ‘πŸ€©

    ℹ️ Stay up to date with important news & announcements for your Reckon software! Click HERE for more info.

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,580 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
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    Good to hear Liza - Just select Net instead of Gross at setup & it should work fine ☺️

    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!)
  • Acctd4
    Acctd4 Accredited Partner Posts: 3,580 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited May 2023 Answer βœ“
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    @Liza Oates I would think it would be that the amount payable is calculated on gross but needs to be deducted from net 😬 (otherwise it will actually be a salary sacrifice deduction eg he'd be getting a reduced tax benefit!)

    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!)

Answers

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,580 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited May 2023
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    Hi Liza

    Yes, RAH can definitely calculate this automatically for you 😊

    You would set up a new, specific Deduction-type Payroll Item for it & - f you've not already done so - create a new Payroll Liability subaccount (as you will be paying these amounts on to Services Australia):


    At this stage (until STP 2 is released), there is no Tax Tracking type allocation (see ** below):


    IMPORTANT: Do NOT select any Taxes! :


    You can select to calculate based on a quantity, hours or a flat amount/percentage (of either gross or net) - the "Neither" option - so you would select Neither:

    ... then whether to calculate this on gross or net:

    You can choose to specify the percentage ("24%") here:

    HOWEVER, Payroll Items should be generic (eg you should be able to use this for any employee requiring CS deductions at a flat rate or %) Therefore, best practice is to leave the Payroll Item itself with no value & enter the specific percentage in the employee's record instead. This is also then easy to update if the rate/percentage changes):

    (You mentioned these deductions relate to a debt so you can also enter this amount in the Limit field. This enables the system to keep auto -adding this deduction to the employee's Paycheques only until this limit is reached! This ensures you don't inadvertently continue deducting once it's paid off)

    This is how it will look on the Paycheque (in the below case, calculating 24% of the employee's gross earnings, but not affecting the PAYG or Super calcs):



    Regarding STP ...RA & RAH are both still using the original STP format at the moment however STP 2 - for RA & RAH - is due to be released mid-June. In the original STP, there is not yet any disaggregation (breakdown), this is only applicable in STP 2. We will see how this is configured once released.

    ** In relation to the CS payment info on the Services Australia website, you are " ... not reporting through STP" yet

    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!)
  • Liza Oates
    Liza Oates Member Posts: 70 ✭✭
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    Thank you Shaz - I knew I could rely on you to have the answer - and the detailed screenshots helps a lot especially as Services Australia are advising this should be calculated on their net pay and not gross but good that this payroll item can be used genercially

  • Charley
    Charley Member Posts: 548 ✭✭✭
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    Lisa that's a first for me and I do heaps; child support is always calculated on gross pay otherwise if you have heaps of salary sacrifice or other deductions they get nothing; Check with Centrelink again and you'll probably find it's gross.

  • Liza Oates
    Liza Oates Member Posts: 70 ✭✭
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    Hi Charley

    This particular child support is for arrears payment and I was reading the letter they sent where I am sure it said net not gross - I will have to recheck this now.

    In the past I have always had set amounts and the percentage claim is a new one for me.

    Thank you for your response though.

    Regards

    Liza

  • Liza Oates
    Liza Oates Member Posts: 70 ✭✭
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    Hi Charley

    I also check on line via Services Australia - 72A notices are calculated on net pay and no protected earnings amount is entered either.


    Regards

    Liza