MYOB Support

When you need to pay = irregular figures=20 on an employee=92s wage, for example holiday wages paid in = advance,=20 it=92s important to remember you will need to adjust the = PAYG Tax=20 figure manually.

Why do I need to manually = adjust the=20 PAYG figure?

MYOB will determine the = employee pay=20 frequency from the employee card setup. The = program will=20 then calculate the PAYG figure on the full wage (including = the=20 additional wages) as if the higher value is a normal pay = amount,=20 therefore the employee could be placed in a higher tax = bracket.=20

For example, assume Mary = Jones is setup=20 as an hourly employee. The Pay Frequency on her = card is=20 set to weekly and her hourly base pay is = $18.00. Mary=92s=20 tax scale is Tax Free Threshold and the current tax scale = used is=20 the 2002/2003 scales.

Mary=92s weekly wage is =

40 Hours @ $18.00=20 =3D $720.00

PAYG=20 Withholding =3D -$160.00 =

Net=20 = Wage &nb= sp; =3D $560.00

Mary is taking 3 weeks = leave and she=20 will be paid these 3 weeks in advance together with her = normal=20 weekly wage (therefore a total of 4 weeks needs to be=20 paid). If we manually multiply the above figures = by 4 the=20 following calculations would apply.

40 Hours @ $18.00=20 = =3D $720.00 x 4=20 =3D $2880.00 (total hours being 160)

PAYG=20 Withholding =3D=20 -$160.00 x 4 =3D=20 -$ 640.00

Net=20 = Wage &nb= sp; =3D $560.00 = x=20 4 =3D $2240.00

However, if you were to = process the=20 full 160 hours on 1 Pay Employee transaction, MYOB = would=20 produce the following figures.

160 Hours @ $18.00 =20 =3D $2880.00

PAYG=20 Withholding =3D -$1158.00

Net=20 = Wage &nb= sp; =3D $1722.00

Notice the PAYG Withholding = figure in=20 MYOB is showing as -$1158.00 whereas our manual calculations = show=20 -$640.00. The reason for this is MYOB recognises = that=20 Mary Jones is paid weekly and therefore sees the figure of = $2880.00=20 as her weekly wage. This higher figure then = places Mary=20 into a higher tax bracket.

To overcome this, simply = click on the=20 PAYG Withholding Amount field and manually adjust the tax = figure to=20 the correct amount (in our example we would adjust the tax = to=20 -$640.00). It is very important that you enter = this=20 figure as a negative.

How do I calculate the = correct PAYG=20 figure for employee=92s with additional wages?

Check the Employee = Information=20 details.

Access this by selecting = Card=20 File from the Command Centre, click on Cards = List >=20 Employee tab. Select the zoom arrow next = to the=20 employee you wish to process the pay for, click on the = Payroll=20 Details tab > click on the Info=20 button. This screen will display the employee = Pay=20 Frequency, Pay Basis and Hourly Base Pay or Annual Base=20 Pay.

Take note of the Pay=20 Frequency.

Now go to = the Payroll and Pay=20 Employee screen. Select the employee, = ensure the=20 figures displayed are for a standard pay run = ie: if the=20 employee is paid weekly then display their weekly pay, if = however=20 they are paid fortnightly then display a standard = fortnightly=20 pay. Note: You also have the option to pay = employee=92s=20 semi-monthly or monthly.
Take note of the = standard PAYG=20 Withholding figure.
Enter the = number of=20 hours the employee is taking in holidays next to the = Holiday Pay=20 category. In our example of Mary Jones the = total number=20 of holiday hours is 120, with 40 hours being her normal = weekly=20 wage.

Now use the same = calculation method=20 as used in the example of Mary Jones. Multiply = the=20 figure by the number of pay periods you are paying in=20 advance. Note: If you pay your = employees=20 fortnightly and the employee is taking 4 weeks leave then = you=20 would need to multiply the figures by 2.
Click on the PAYG = Withholding field=20 and manually adjust the figure, ensure you enter the = amount as a=20 negative.

If you = have any=20 difficulties in calculating the PAYG figure you can log onto = the ATO=20 website at http://www.ato.gov.au, and download a Tax Withheld = Calculator=20 (Windows only) or calculate the amounts through the ATO=92s = Internet=20 site.

This information is of a = generic=20 nature. For specific advice regarding your particular = circumstances=20 please seek assistance from your Accountant or the = Australian=20 Taxation Office