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Flagging a payee as being subject to MLS allows FastTrack360 to automatically report the relevant tax treatment code to the ATO via STP reporting to indicate that the payee has requested additional tax to be withheld to cover their Medicare levy liability.

However, it is important to note that FastTrack360 will not calculate and apply the additional tax to the payee’s tax withholding automatically when tax is calculated at the Tax pay batch stage. Therefore, the Medicare Levy Surcharge option should only be enabled if tax is being to withhold the correct, additional amount of tax from the payee’s earnings to cover the MLS it is necessary to do the following:

• add a deduction to the payee of type Extra Tax to deduct the additional percentage from gross earnings

• manually adjusted at the Tax pay batch stage to factor in the

• additional withholding that applies to the payee, if practical.