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Under STP Phase 2 it is a requirement to report a tax treatment code that, among other things, identifies if a payee is subject to an MLS and the surcharge tier that applies. Therefore, if a payee’s tax is being adjusted to withhold an additional amount to cover their Medicare levy liability, the payee can be flagged as being subject to the MLS and the relevant surcharge tier can be recorded on the Payee record.
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Please be aware that the new fields added to the Payees PAYG Tax Details section are for STP Reporting reporting purposes only. The application of this additional surcharge needs to be calculated manually and then applied via a Manual Tax Adjustment in an adjustment manual tax adjustment in a pay batch. |
The new fields available in the PAYG Tax Details section of the Payee Record include:
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This enhancement provides an agency with the ability to flag Payees that qualify for the Medicare Levy Surcharge and the applicable tier, which will support payees who have requested an additional amount to be withheld from their earnings towards covering the MLS so that the correct tax treatment can be reported through STP Phase 2 reporting requirements for these Payees.
Configuration
On upgrade to v12.17 where an existing payee qualifies as requiring the application of the Medicare Levy Surcharge, the existing Payee record can be updated as follows:
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