STP2 Error Message from ATO

Jan57
Jan57 Member Posts: 10 ✭

Completed my first payroll under Reckon Desktop STP2 and submitted to ATO and got an error message saying "submission rejected by ATO" - Contractor ABN must be supplied if an Income Stream Collection tuple with a type code Voluntary Agreement contains a Gross Payment or PAWGW amount that is greazter than zero.

Trouble is the relevant employee doesn't have a Voluntary Agreement but a Voluntary/Flat Rate of 39%. The Voluntary Agreement section is greyed out so can't be changed. How do I fix this? Had no issues under STP1.

Answers

  • Nickiu
    Nickiu Reckon Staff Posts: 28 Reckon Staff

    Hi Jan57,

    This issue have been brought to our attention. Our dedicated team is diligently working to resolve this matter. and hoping to get this fix in the next update.

    For more information: https://community.reckon.com/discussion/8034234/

    Best regards,

    Nick

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,315 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited September 2023

    Hi Jan

    I'm not sure what Nick's referring to as this isn't an issue but I've replied under your other thread 😊

    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

    [email protected]

    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!)
  • Jan57
    Jan57 Member Posts: 10 ✭
    edited October 2023

    Following on from my issue with the Voluntary Flat Rate of tax for one of my employees, I have found a work around being:

    Change the Tax Scale to Scale 1: Tax free threshold not claimed which then allows the Income Type to be Closely Held Payee.

    When completing his pay run I have selected PAYG Tax - Tax Withheld Custom Amount and entered the correct amount for a 39% voluntary rate. This makes the pay slip correct.

    However when submitting to the ATO I still get the same error message even though there is no longer a Voluntary Agreement recorded.

    How do I rectify this please? I have 2 pay runs with this error and have converted each pay run back to draft and resubmitted the first one again (done this 7 times since early September) but still get the same above error message each time.

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,315 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited October 2023

    @Jan57 What is the nature of this particular employee's employment arrangement ? How has this specific rate of 39% been determined ? If they are just wanting additional tax withheld, they're just classified as normal SAW & you can add the additional amount - or additional % - of tax in their record. If they are wanting less tax withheld - depending on their status - they may need to have just completed a specific withholding form for this (eg there's one specific to seniors who are claiming the SAPTO: https://www.ato.gov.au/assets/0/104/1328/1465/c07b595a-2d60-45a1-a4a3-365c64ed60a9.pdf)

    A Closely Held Payee (CHP) is only someone personally linked/related to the entity (eg a spouse, child, parent etc of a partner in a Partnership for example) This option should only be selected if previously utilising the CHP reporting deferral.

    A Voluntary Agreement is applicable ONLY to contractors, not normal employees being paid ordinary wages. It is this withholding declaration: https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/BUS_16223_NAT2772.pdf

    It states the specific rate or amount to be withheld in PAYGW for a particular Contractor. This will be what the error message is relating to as you need to have the ABN recorded & the relevant rate/amount entered in their "Employee" record for this type of (contractor-only) employment selection.

    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

    [email protected]

    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!)
  • Jan57
    Jan57 Member Posts: 10 ✭

    Hi Shaz

    He is a director of two companies. He is a closely held payee for both. First company he claims the tax free threshold. The second company he doesn't claim the threshold with, his accountant and he agreeing on a 39% tax rate. The first company pay roll I have no issues with his profile and sending to the ATO. His other payroll from the second company is the one I am having issues with.

    Second company - I have changed his Tax details under his profile to be Not claiming the tax free threshold and a Closely held payee. To get the correct amount of tax withheld I have increased the amount on his pay slip to be the 39%, which he wants. He has had this arrangement for at least the last 10 years.

    Only after sending to the ATO does the error message come back still indicating that there is a Voluntary Agreement and wanting an ABN. He doesn't have an ABN and his tax file number is in his profile and no he is not a Contractor for the second company.

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,315 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited October 2023

    A person can't be both a SAW employee AND a CHP ... If they're receiving regular payroll payments - like any other employee, with PAYG & Super calculated each time - & this detail has been being reported each pay via STP, they are NOT a "CHP" for STP2 purposes!

    The CHP classification for STP2 ONLY applies to those whose payments were being reported under the original CHP concession. This was where payments were NOT treated as regular pay runs & liabilities were determined later (usually at EOFY).

    With either CHP or SAW selection, you should be able to choose 8-NoTaxC & enter 39 as the Tax % :

    This should prevent that error message on lodgment.

    Feel free to email me direct if you need 😊

    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

    [email protected]

    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!)
  • kayli34
    kayli34 Member Posts: 1 ✭

    Hi there,

    I have been reading through all the comments as I've had the same problems since switching to STP2. We are Closely held payees with a voluntary flat rate (not a voluntary agreement) and I got the same error messages from the ATO when I submitted our payruns. I have had multiple calls to the Reckon help line with no one being able to sort it out for me. Tonight I think I've managed to sort the problem out myself - not sure how but it seemed to work and the ATO submission was finally successful.

    In the employee setup I chose Closely Held Payee with the Tax scale 1: Tax free threshold not claimed.

    Then I set up a new payrun. Next to the employees names in the payrun there is a little "blue pen" icon for editing. I clicked on this and it opened a window to edit the % tax withheld. I was then able to change the amount to what I wanted. I saved it and it has all worked to be the correct amounts.

    I've taken some screen shots which I can send to you if helpful. I just need to blur out the personal details.

    I hope you've already had success! This has been stressing me out for weeks!

    Kind regards

    Kayli

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,315 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert

    Hi @kayli34 & @Jan57

    This thread was posted under the "Reckon Accounts (Desktop)" (RA) product category so my software advice & screenshots above all relate to that specific program but ... I'm now wondering if you're both actually using "Reckon Payroll" (or another reckon product) instead ... ? 😬

    I specialise exclusively in RA/RAH so if that's the case, unfortunately I can't be of much help there but I'd recommend searching/posting in the relevant category as you'll probably find another user has had the same query & someone has provided assistance there ☺️

    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

    [email protected]

    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!)
  • Jan57
    Jan57 Member Posts: 10 ✭
    edited October 2023

    Thanks Kayli and Shaz

    Yes it is Reckon Payroll. I originally had Reckon One and this converted to Reckon Payroll on moving to STP2.

    @kayli34- I did the same procedure you described whilst on the phone to Reckon Support. I had to delete 3 pay runs leading up the the first one with the error message and then reenter the first pay run. Unfortunately it didn't rectify the problem. Reckon Support has told me it is a backend issue and they will contact me in 72 hrs (?). To date I have rarely had Support ring me back except to ring weeks later to see if I have rectified the problem when I had other issues.

  • Rav
    Rav Administrator, Reckon Staff Posts: 15,192 Community Manager Community Manager

    Hi all

    Unfortunately, this is currently a known issue that we're investigating in Reckon Payroll. More info on this HERE.

    From what I understand it hasn't been a straightforward issue to resolve however its one of the top priorities for our dev team at the moment.

    Apologies for the hassle its causing at the moment. More updates and info to follow on this.


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