Identification of Upward/Downward Tax Variation (AU Only)

Description

A new field labelled Variation Type has been added to the PAYG Tax Details section of the Payroll > Payee > Payee Entry screen to identify if a payee is subject to an upward or downward variation to their tax rates. An example of the new field is highlighted below.

Open

The new field is available only if the payee’s tax scale is set to Variation - Approved Withholding Variation Percentage, in which case it is mandatory to select one of the following options from the field:

• Downward Variation - indicates that the payee has provided a PAYG withholding variation application form (NAT 2036) that indicates the payee wants to reduce the amount of tax that is being withheld from their earnings.

• Upward Variation - indicates that the payee has requested to increase the amount of tax that is withheld from their earnings over and above what is required to be withheld.

Benefits

Under Single Touch Payroll (STP) Phase 2 it is mandatory to report if a payee has a downward variation to their tax withholding rate. Therefore, this enhancement allows you to configure Payee records accordingly in preparation for STP Phase 2 reporting.

Configuration

On upgrade the Variation Type field will default to blank for all existing Payee records where the tax scale is set to Variation - Approved Withholding Variation Percentage. You will be unable to save changes to such Payee records after upgrading until you select the relevant variation type for each payee validity period where the tax scale is set to Variation - Approved Withholding Variation Percentage.

When adding a new payee who has a tax scale of Variation - Approved Withholding Variation Percentage you will also be unable to create the new Payee record unless you select an option in the Variation Type field.