Hi I am preparing my annual payment summaries & I have a problem.

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  • Updated 4 years ago
I am using Reckon Accounts 2015 and have a problem with one of my payment summaries.
This particular employee has only one payment for the year - an exgratia ETP payment.
I have processed as such, using the tax code Post June 1983 Untaxed Element (Low Rate Threshold) (O) - meaning that the ETP will be taxed at 32% (he was under his preservation age).

My problem arises in that the tax amount is now showing on both the payment summary (which should effectively be NIL income & NIL tax for the year), as well as on the ETP statement - which is showing the correct details.

I am wondering how I can get rid of the tax item on the payment summary, but have it still show correctly on the ETP summary.

I have tried re-editing the paycheque, but nothing seems to work.

Any ideas?
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Mark

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Posted 4 years ago

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Mark.    I'm confused....   You've stated you've selected an entry that will tax at 32% (O),  and there was in fact an ETP payment.   So doesn't hat yield a summary disclosing both the payment and that tax rate?  This sounds like a question for a Tax Agent,  but if the program is using (O) and contains an ETP,  isn't the program doing what is expected when showing such numbers on the actual summary?  I'd think it is, with that explanation.   Perhaps re-explain in case others draw the same (perhaps wrong) conclusion to this query.

Gary


Gary
(Edited)
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Mark

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Hi Gary
The ETP summary is fine - it is working as it should - showing the gross ETP & Tax at 32%.
The problem is that the system is also producing a normal payment summary which shows nil income (ordinary wages), but shows exactly the same amount of tax on the ETP form.

If I were to lodge as is, the ATO would believe that the employee has nil ordinary wages with 11k tax, and has an etp with $36k income & $11k tax. The tax position appears to have doubled by showing on both the ETP & ordinary PAYg Payment Summary.
I see - two different outputs:
a) -  the EFT statement, (which is fine) AND
b) -  the payment summary (which shows NIL gross,  yet the same 11K tax)....

Sorry - this become a tax agent question.  But the way you've explained it in english here,  seems to makes sense.  The employee did in fact not receive any Gross,   and yes, he did have to pay 11K in tax.  But with the ETP adding to the story, it is the ETP that demonstrates there was a 36K amount (your exgratia payment),  which is the cause for the 11K of tax being in the picture.

You concern is what the ATO sees if it saw (a) in isolation from (b).....  That aspect I can't comment on, sorry - my knowledge is more at the software, integration and technical issues end.   But run this past a Tax Agent I suggest...... many are AP's on this forum.


Gary Pope
An Accredited Partner- Consultant  (VIC. Aust)
http://www.alchester.com.au/reckon-accounts-clarified/
"Working with Accountants/Bookkeepers PPs/APs, as an
      independent IT Professional
and retired FCPA Accountant"