Total allowances EOY payment summaries

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  • Updated 11 months ago
How to show total allowances on the PAYG payment summary for employees. All employees receive allowances that have been set up under (additions to net pay) Should the allowance have been set up under something else in payroll items so it shows up on their end of year payment summaries?
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Meredith Newton

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Posted 12 months ago

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John G, Information Support Analyst

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Hello Meredith,

Welcome to the Reckon Community.

You should first clarify the tax status of the Allowances with your Accountant.

Taxable allowances use the Tax Tracking Type of Gross Payments and tick the Tax items on the Taxes screen and are included with Gross Pay on the Payment Summary.  They will not be listed separately on the Payment Summary.

Tax free Allowances should use the Tax Tracking Type Allowance and not tick the Tax items on the Taxes screen, and these will be posted to the Allowances section of the Payment Summary.

Hope this helps.


regards,
John
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John Graetz

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Hi John.  I cannot agree that your answer is correct.  I include taxable allowances using the tax tracking type of Allowances so that they are segregated on Payment Summaries as certain of these Allowances are flagged in this manner as they have the potential to have offsetting expenses claims. I place a tick against PAYG Tax in the Tax Box. If they get tracked in Reckon as gross payments, then they will not appear under the allowances section, where they should appear according to instructions issued by the ATO.
I don't know what your definition of a Tax Free Allowance is, but by definition, if there is such a thing, it should not be tracked under allowances as to do so, would cause it to appear on the Payment Summary where it would automatically be treated as a taxable allowance.  Again, if there is such a thing it should be tracked as NONE and in the Tax Box, there should not be a tick against PAYG Tax   There are other allowances from which Tax is not deducted at the time of payment and these should still be tracked as Allowances but in their case, the Taxes box should not have the PAYG Tax ticked. These are still treated as taxable earnings but do not have to have tax deducted at the time of  payment e.g. motor vehicle travel claims for the first 5,000 kms each year and there are some other ones as well.
Refern to https://www.ato.gov.au/business/payg-withholding/payments-you-need-to-withhold-from/payments-to-empl...  for further information.
John L G
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Meredith Newton

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Thankyou John, this has helped me produce an acceptable payment summary for our employees and im confident the payment summary sent to ATO will comply.
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John Graetz

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Great news Meredith.  Thanks for responding.
John L G
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Tania

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Hi John

I also have  pay item that I need to be shown as an allowance on the payment summaries, how do I do this? I have tried to edit the pay item but it will not allow me to.

RegardsTania