Tax Scale Defines the tax scale that determines the amount of tax that is withheld from the payee’s pay. It is mandatory to select a tax scale before the payee can be assigned to a pay company and therefore before the payee can be paid in a pay batch. Seasonal Worker Programme If ticked, indicates that the payee is a foreign resident who is working in Australia under the seasonal worker programme (SWP). This field is only available if the Variation - Approved Withholding Variation option is selected in the Tax Scale field. Payees working under SWP are either subject to a flat rate of tax, in which case the applicable tax rate must be keyed in the Withholding Variation % field, or can be exempt from tax, in which case the Exempt From Withholding field must be ticked (for more information, see below). Exempt From Withholding If ticked, indicates that the payee is working under the seasonal worker programme and is exempt from tax being withheld from their earnings and therefore: - no tax will be calculated and withheld from the payee’s earnings when the payee is included in a pay batch - the payee will not be reported in Single Touch Payroll reports. This field is only available if the Seasonal Worker Programme field is ticked. Horticulturalists/Shearers Tax If ticked, indicates that the payee is subject to a special, flat rate of tax because they are work assignments of no longer than 6 months for the same host employer in the horticultural and shearing industries. This field is only available if all the following conditions apply: - the Variation - Approved Withholding Variation option is selected in the Tax Scale field - the Australian Resident or Foreign Resident option is selected in the Tax Status field (for more information, see below) - a tax file number has been keyed in the TFN Number field or the TFN Application in Process option has been selected in the No TFN Reason field (for more information, see below). Withholding Variation % Defines the tax rate that applies to the payee if the payee is: - subject to a withholding variation that increases or decreases the amount of tax to be withheld form their earnings - working under the seasonal worker programme. This field is only enabled if the Variation - Approved Withholding Variation option is selected in the Tax Scale field and is mandatory unless the Exempt From Withholding field is ticked. Variation Type If the payee is subject to a withholding variation, this field identifies whether the variation increases (upwards variation) or decreases (downwards) the amount of tax that is withheld from their earnings. If the payee is subject to a downward variation, this field populates a specific tax treatment code in Single Touch Payroll reports that allows the ATO to identify why the payee’s tax withholding is less than otherwise expected. This is field is only available and is mandatory if the Variation - Approved Withholding Variation option is selected in the Tax Scale field and the Seasonal Worker Programme or Horticulturalists/Shearers Tax fields are not ticked. Medicare Levy Adjustment If ticked, indicates the payee is a low-income earner with dependents and is eligible for a Medicare levy adjustment. This is also known as a Medicare levy reduction. This field can be ticked to record the fact that a payee is eligible for a Medicare Levy adjustment. However, the system will not calculate and apply the adjustment automatically; the adjustment amount must be calculated manually, factoring in the number of dependents (see below), and must be applied manually at the Tax stage of a pay batch to reduce the payee's tax withholding accordingly.
Dependents
Defines the number of the payee’s dependents based on which the payee is claiming a Medicare levy adjustment. This field is available only if the Medicare Levy Adjustment field is ticked, in which case it is mandatory to specify the number of dependents. Medicare Levy Surcharge If ticked, indicates that the payee has provided a Medicare levy declaration form (NAT 0929) to request that an additional amount of tax be withheld from their earnings to cover their Medicare levy surcharge (MLS) liability. If ticked, the tax treatment code that is reported to the ATO in Single Touch Reporting will indicate that an MLS is being applied to the payee's PAYG withholding. However, FastTrack360 does not apply the additional withholding automatically and a manual tax adjustment is required to factor in the surcharge each time tax is withheld in a pay batch. If a payee does require additional withholding to contribute towards the MLS, a deduction type of Extra Tax can be added to the Payee record to deduct the additional percentage (see Surcharge Tier below) from each pay. For an MLS to be applicable the payee must be an Australian resident for tax purposes, must provide tax file number and cannot be subject to a Medicare levy reduction or any tax offsets. Therefore, this field is only available when the following conditions apply: - the Tax Scale 1 or Tax Scale 2 options are selected in the Tax Scale field - the Medicare Levy Adjustment and Tax Offset Claimed fields are not ticked. Surcharge Tier Identifies the Medicare levy surcharge (MLS) tier that applies to the payee, whereby the selected tier determines the rate at which the surcharge applies as follows: - Tier 1 - 1% - Tier 2 - 1.25% - Tier 3 - 1.5% This field is available only if the Medicare Levy Surcharge field is ticked, in which case it is mandatory to select an option in this field. FastTrack360 does not withhold the additional tax automatically and a manual tax adjustment is required to factor in the surcharge each time tax is withheld in a pay batch. This field only identifies the relevant surcharge tier/percentage for information purposes and so that the relevant tax treatment code can be reported to the ATO via Single Touch Payroll if the payee’s tax is adjusted manually to factor in the MLS.
Tax Offset Claimed
If ticked, indicates that the payee is claiming a low-income tax offset. Tick this field if the payee has submitted a Withholding Declaration form (NAT 3093) form and has answered YES to question 7 on the form. Offset Amount The estimated total low-income tax offset amount that the payee is claiming. This field is only available if the Tax Offset Claimed field is ticked, in which case the total tax offset amount that the payee has specified under question 7 of the Withholding Declaration form (NAT 3093) form must be keyed into this field. Click here for more information about how low-income tax offsets are applied in FastTrack360. Seniors & Pensioners Tax Offset If ticked, indicates that the payee is subject to a seniors and pensioners tax offset (SAPTO). If ticked, the tax treatment code that is reported to the ATO in Single Touch Reporting will indicate that SAPTO is being applied to the payee's PAYG withholding. However, FastTrack360 does not apply the relevant tax offset automatically and a manual tax adjustment is required to factor in the offset each time tax is withheld in a pay batch. Therefore, this option must only be ticked if manual tax adjustments will be applied to the payee’s tax to factor for the offset. For SAPTO to be applicable the payee must be at least 66 years old at the end of the financial year in which they are claiming the offset. The payee must also be an Australian resident for tax purposes, must provide a tax file number and must be claiming the tax-free threshold. Therefore, this field is only available if tax scales 2, 5 or 6 are selected in the Tax Scale field. Status Identifies the payee’s seniors and pensioners tax offset (SAPTO) status, which defines the extent of the tax offset that the payee can claim and can be one of the following: - Single - Couple - Illness Separated Couple. This field is available only if the Seniors & Pensioners Tax Offset field is ticked, in which case it is mandatory to select an option in this field. The option selected in this field affects the tax treatment code that is reported to the ATO in Single Touch Reporting and records the applicable SAPTO status so that the relevant tax offset can be applied manually to the payee’s tax withholding. FastTrack360 does not automatically offset tax based on the option that is selected in this field. A manual tax adjustment is required to factor in the offset each time tax is withheld in a pay batch. Exempt From No TFN 28 Day Rule If ticked, indicates that the Australian Taxation Office (ATO) have given the payee an exemption from providing their tax file number (TFN) within 28 days of commencing employment. The system will not automatically tax the payee at the highest rate if a TFN is not provided within 28 days of commencing employment. If un-ticked, the system will automatically change the payee's tax scale to 4a (for Australian residents) or 4b (for non-residents) if a TFN is not provided within 28 days of the payee's employment start date. That means the system will begin to tax the payee at the highest tax rate after 28 days have elapsed since commencing employment, as required by the ATO, and will continue to do so until the payee provides a TFN or a TFN exemption. No TFN Provided (28 day rule applied) If ticked, indicates that the payee failed to provide a tax file number (TFN) or a TFN exemption within 28 days of commencing employment. In such circumstances, the system automatically changes the payee's tax scale to 4a (for Australian residents) or 4b (for non-residents), resulting in the payee being taxed at the highest rate according to the requirements of the Australian Taxation Office (ATO). This field is automatically set by the system if the abovementioned conditions apply and remains ticked until the payee's tax scale is changed manually and a TFN is keyed in the TFN Number field. TFN Number Defines the payee’s tax file number (TFN) that uniquely identifies the payee to the Australian Taxation Office (ATO). This field is mandatory unless an option is selected in the No TFN Reason field. No TFN Reason Defines the reason why the payee has not provided a TFN. This field is available only if a TFN has not been keyed in the TFN Number field, in which case it is mandatory to select the relevant option from this field. The options available in this field are: - TFN Application In Process - select this option if the payee’s TFN Declaration states that the payee has applied to obtain a TFN. Note that if this option is selected but no TFN number is keyed in the TFN number field after 28 days of the employment start date, the system will automatically change this option to the Declined TFN Number Declaration (for more information, see below) unless the Exempt From No TFN 28 Day Rule field has been ticked. - Exempt - Under 18 - Low Income - select this option if the payee is exempt from providing a TFN because they are under 18 and their earnings are insufficient to have tax withheld. - Exempt - Receive Pension/Benefit or Allowance - select this option if the payee is exempt from providing a TFN because the payee is receiving a social security or service pension or benefit (other than Newstart, sickness allowance, special benefits or partner allowance). - Declined TFN Number Declaration - select this option if the payee has declined to provide a TFN within 28 days of commencing employment. If this option is selected the payee will be taxed at the highest rate that applies to their tax residency status. Basis of Payment Defines the basis under which the payee is employed. This field is mandatory and defaults to L-Labour hire but can be changed to the relevant option based on the basis of payment as indicated on the payee’s TFN Declaration form. This field is locked down and cannot be edited while the payee is being processed in a pay batch and remains locked down after the payee has been processed in a closed pay batch. To change the payee’s basis of payment once the payee has been processed in a closed pay batch you must create a new payee details validity period. Tax Status Defines if the payee is an Australian resident, foreign resident or working holiday maker for tax purposes. The options that are available in this field depend on the tax scale that is selected. For example, if you have selected Tax Scale 1, 2, 4a, 5 or 6, the only option that is available in the Tax Status field is Australian Resident because those tax scales apply to Australian residents only. STSL Indicates that a payee has a study and training support loan (STSL) debt such as a Higher Education Loan Program (HELP), VET Student Loan (VSL), Financial Supplement (FS), Student Start-up Loan (SSL) or Trade Support Loan (TSL) debt. This field is locked down and cannot be edited while the payee is being processed in a pay batch and remains locked down after the payee has been processed in a closed pay batch. To change the payee’s STSL status once the payee has been processed in a closed pay batch you must create a new payee details validity period. TFN Declaration Signed If selected, indicates that the payee has signed off on their TFN declaration. This field is locked down and cannot be edited while the payee is being processed in a pay batch. TFN Declaration Signed Date Defines the date on which the payee signed off on their TFN declaration. This field is locked down and cannot be edited while the payee is being processed in a pay batch. TFN Reported Date Displays the date on which the payee’s TFN declaration information was reported. The date in this field is set automatically when the payee is included on a TFN Declaration report. Note that the date displayed in this field indicates that the payee’s TFN declaration details have been included on an electronic TFN Declaration report but not necessarily the date the report was submitted to the ATO. |