PAYG withholding variations

Under STP Phase 2 a tax treatment code must be reported for each payee to identify all aspects of the tax treatment that is applied to a payee. One of the attributes that must be identified by the tax treatment code is whether a payee is subject to a downward variation in PAYG withholding.

Currently, FastTrack360 features a tax scale labelled Variation - Approved Withholding Variation Percentage that identifies that a payee is subject to a PAYG withholding variation and allows a flat withholding percentage to be applied to the payee's taxable earnings. However, in FastTrack360 there is currently no way to capture whether a withholding variation is an upward or downward variation.

To facilitate this requirement, an enhancement has been made in the FastTrack360 Payroll module to allow the variation type to be recorded for payees who are subject to the Variation - Approved Withholding Variation Percentage tax scale.

What can you do to prepare?

When creating a new payee record or editing an existing payee record in FastTrack360 v12.10 Patch 3 it is mandatory to select a variation type if the payee’s tax scale is set to Variation - Approved Withholding Variation Percentage. However, you may have existing payee records that are subject to the Variation tax scale that you have not edited since upgrading to v12.10 Patch 3. It is important that you do so to set the relevant variation type before STP Phase 2 reporting capability is provided in FastTrack360, which is expected to be in late November/early December 2022.

For more information, refer to the following topic in the v12.10p3 What’s New Guide: Identification of Upward/Downward Tax Variation (AU Only) - FastTrack360 Online Help - Confluence (atlassian.net).