HECS Debt set up

Jo Arnold
Jo Arnold Member Posts: 89 Reckoner Reckoner
in Reckon Accounts (Desktop)

I have an employee who has a hecs debt. As the repayment amount is calculated as a percentage of gross income, do I need to enter the percentage amount in the employees payroll records or does Reckon automatically calculate the amount?

Answers

  • Kris_Williams
    Kris_Williams Member Posts: 4,188 Reckon Hall of Famer Reckon Hall of Famer

    In the tax details of the employee’s name select the relevant tax scale and tick the Help debt box. I’m not sure but I think it’s also based on the income, not just a % of income, and the % changes depending on the income

  • Jo Arnold
    Jo Arnold Member Posts: 89 Reckoner Reckoner

    Hi Kris,

    Thanks for your response. I've done all of the above. Yes, the percentage of tax for the hecs debt is based on the employees annual gross income. What I'm not sure of is whether I need to put that percentage value into Reckon or if the software makes this calculation?

    Thanks

    Jo

  • Kris_Williams
    Kris_Williams Member Posts: 4,188 Reckon Hall of Famer Reckon Hall of Famer

    No you just have to tick the Help debt box, Reckon will work it out I believe

  • Jo Arnold
    Jo Arnold Member Posts: 89 Reckoner Reckoner

    ok great. Thank you.

  • KimBoTCC
    KimBoTCC Member Posts: 15 Reckoner Reckoner

    Hi there

    I have staff with HECS debts, and also reportable fringe benefit amounts. They have the HELP Debt box ticked, but it does not seem to be taking out enough tax, as some have been given a HECS bill when preparing there 2023 return.

    Is there anyway to fix this @Rav??

    Thanks in advance for your help!

  • KimBoTCC
    KimBoTCC Member Posts: 15 Reckoner Reckoner

    Just thinking about this further - there is probably not much we can do, apart from adding in an extra tax payment each pay... as the reportable amount is not entered into the system until the end of each FBT year!!!

  • Kris_Williams
    Kris_Williams Member Posts: 4,188 Reckon Hall of Famer Reckon Hall of Famer

    that’s exactly what I would do. Maybe ask employee how much extra she had to pay and work it out weekly

  • Acctd4
    Acctd4 Accredited Partner Posts: 4,109 Reckon Accounts Hosted Elite Expert Reckon Accounts Hosted Expert

    @KimBoTCC

    The requirement for compulsory HECS repayments includes ALL taxable income (including income from investments - eg bank interest, cryptocurrency, shares, rental property etc, self-employment) as well as add-back of FBT, RESC & investment losses. These components are referred to as their Repayment Income (or "RI")

    Therefore, an employee may have other income sources (that are unrelated to employment) which can result in a tax shortfall. Having additional tax withheld is beneficial as if owed, it covers it & if not, they will receive it back as a refund 😊

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  • SuzanaVarga
    SuzanaVarga Member Posts: 3 Novice Member Novice Member

    Hi Shaz,

    I am still unclear on how I should create repayments from our new staff members pay. Where can I find this information please?

  • Acctd4
    Acctd4 Accredited Partner Posts: 4,109 Reckon Accounts Hosted Elite Expert Reckon Accounts Hosted Expert

    Hi @SuzanaVarga

    If you ensure you tick the HELP Debt box in the employee’s record, it will calculate additional tax automatically, based on the earnings.

    The new Tax Table update reflects the reduced threshold for those tax tables, following the 20% debt reduction legislation recently passed.

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