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In the past the method applied by FastTrack360 has been based on whether the adjustment is in the current or prior financial year, however there are some instances where the method might not fit the circumstances of the adjustment. For example, if a payee is paid an adjustment pay for a period in the prior financial year when they have not earnt anything in the current financial year, the Method Bii calculation method is used - howeverwas used automatically. However, because a payee will have little or no normal earnings at the start of a new financial year, the resulting withholding amount would be very small or zero thereby resulting in the payee being under taxed.
There are also scenarios where the Method Bii tax calculation is more relevant to specific types of payments, irrespective of whether the payment applies to an adjustment period in the current or a prior financial year. An example of this would be for payments that are bonuses and commissions, usually paid as a lump sum that relates to multiple prior periods. These payments are required to be taxed using the Method Bii tax calculation method. This is used so a payee does not get over-taxed in the period in which they receive their lump sum bonus or commission payment.
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