PAYG Tax incorrect

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  • Updated 2 years ago
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Hi, I'm new to this, so I am hoping someone may be able to help me.  I have entered a new employee into our system, and when i went to create his payslip, the PAYG tax came up incorrect. He should have been paying $107 tax, however, on his payslip it has $132 coming out.    Any ideas as to why this has happened? I have entered in the correct tax code when setting him up.  
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Posted 3 years ago

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John G, Information Support Analyst

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Hello Suzanne,

Welcome to the Reckon community.

As a first step check that you have indeed applied the right PAYG tax code to the Employee record and that no other tax options have been selected (eg extra tax).  

Is super handled correctly - are you taxing the super guarantee?

Does this employee use a unique payroll item and is it properly configured for tax?

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I'm also have trouble with PAYG income tax calculations. I'm using Reckon One.

I'm paying employees monthly, but can't figure out how ReckonOne is calculating the income tax amount. Not sure how the number of pay periods effects the calculation. 

I have gone back and checked the pay items and the tax setup for employees. But there still appears to be an extra amount in tax each month being calculated. I have the same effect occuring on several employees.

As I am paying monthly I calculated the total tax required in the FY and divided by 12 to calculate the monthly amount due. But the automatic calculation in Reckon one is higher than my manual monthly tax calculation.

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John G, Information Support Analyst

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Hello Andrew,

Welcome to the Reckon Community.

Firstly, check in the Employee Record Tax tab, that that you have entered a Tax File Number and selected the correct Tax Scale and Residency status.  Are any other fields selected correctly that may impact on the tax calculation? - eg HELP, Medicare Levy variation, etc.

Next, in Employment tab, check that the correct Pay frequency has been selected.

Then in the Pay setup tab, check that items have been entered correctly with the correct rate basis selected.  

Now go to Payroll Settings and in Pay Items, check whether Deduction and Additional items are correctly adjusted for their taxable status.

Finally, after processing a pay in Reckon One check the calculation against the ATO's PAYG withheld calculator.

Hope this helps.

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Donna Pinnell

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I had exactly the same issue for just one employee. Turned out that when I set up the payroll super item for him (he had a new super payroll item that no-one else had) I had left both of the PAYG Tax and State Payroll Tax items ticked, so it was calculating an extra amount of tax for the super. As soon as I went back through the super payroll item questionnaire, I saw the mistake and unticked it. 

Which was lucky, since I had just created another one that hasn't had any super to it yet luckily.
Hope that helps.
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Sue Boor

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You are a Ledgend!  This has been driving me insane for months.  Thank you so much for your input.  My only employee which was out every week is now fixed.
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John G, Information Support Analyst

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Thanks Donna for the added information and glad it is now resolved.

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Rob N Lis Evans

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Hi, i have thw same issue, extra tax calculated on the super amount. I have checked the settings and cannot find a wrong box ticked. Any other suggetions?
Also all employees are correct except 1.... and I have checked the others for any difference - can't spot any difference.