GST and VAT Rate Maintenance

A Goods and Services (GST) tax rate (or for UK, Value Added Tax VAT) must be configured before attempting to use the Payroll module to pay payees. The GST / VAT rate is used by the system when calculating certain payments to company contractors (payees with a tax type of Company) who are registered for GST. Specifically the GST rate is used in the following ways:

• to calculate the GST / VAT payable to payees for providing their services to clients of the agency by which they are employed.

• to calculate the GST payable by payees on any amounts they have chosen to have deducted from their pay by the agency to cover salary sacrifice arrangements, child support payments, additional superannuation contributions or alike.

A GST / VAT rate has a validity period that determines the period during which the GST / VAT rate applies. The validity period can have no end date if, for example, the current GST / VAT rate is applicable indefinitely. If there is a change in the GST / VAT rate, the current GST / VAT rate can be closed off, by setting a validity end date, and a new GST / VAT rate can be created. The end date of the validity period cannot be earlier than date of the last pay batch in which the GST /VAT rate was used.

Where a new GST / VAT rate is created to carry over from a prior rate, its validity period must not overlap that of an existing GST / VAT rate for the same payroll country. This is because only one GST / VAT rate can be applicable at any time. The validity start date of the new GST / VAT rate must fall one day after the validity end date of the previous GST / VAT rate so that there are no gaps between validity periods. This ensures that a GST / VAT rate is always valid on any given date from the time the first rate becomes effective.

The validity start date of each GST / VAT rate can be forward dated and the system will automatically use the GST / VAT rate that is valid on the end date of the pay period to which a pay batch corresponds.