An employer may be required to deduct Child Support from employees’ wages under the Child Support Scheme. Employers will be notified by the Child Support Agency and advised as to the start date and amount to be deducted each pay period. The employees will be notified in writing of their requirements.
You set Child support deductions up in Payroll, Maintenance, General, Additions and Deductions as a Deduction After Tax. And select either percentage or amount as the type. Leave the amount or percentage field blank and add the value to the employee. This way, you can use the same deduction code for multiple employees.
Ensure that the Child Support Deduction has an STP 2 Reporting Group of Exclude from STP Reporting on the STP Reporting Tab.
Child Support reporting to Services Australia via STP2 is currently voluntary as per the ATO Employer Reporting Guidelines for STP2; as such, the below Reporting Group, Deduction Items are currently not included in MicrOpay.
D Child Support Deduction
G Child Support Garnishee
You should process and report your Child Support payments to Services Australia.
Protected Earnings
When you receive correspondence advising that Child Support is to be deducted from an Employee's Net Pay, they may also advise Protected Earnings. There is no field for Child Support Protected Earnings, but you can utilise the Min Pay Limit field in the Employee's Pay Details.
This field contains the minimum pay amount per period for the employee. It will not affect the employee's pay, but you will see a warning on the Payroll Audit Report when employees have a net pay below the Min Pay Limit. You would then need to modify the transaction, if required, before processing EFT Export or producing Pay Advices.
You can link the Deduction to a Creditor record and create a bank file to pay the Child Support Agency. For more information on Creditors, refer to the article EFT Creditor Payments set up.