Payroll Tax is a state tax. Each state or territory will have a body that administers Payroll Tax, such as the Office of State Revenue. If you are unsure whether you are liable for Payroll Tax, contact the Office of State Revenue or equivalent in your State or Territory.
Visit these links for information on Payroll Tax:
If you pay wages to employees in Australia, you may be liable for Payroll Tax. You can use the Payroll Tax Wages Report to complete your Payroll Tax return.
Note: The report doesn't calculate the amount of Payroll Tax owed. Revenue Offices have online calculators and/or lodging facilities that will do this based on the values you enter. These facilities typically hold tax rates and account for any thresholds that apply.
This report requires setup before it can be used. The report will group and total monthly values into categories such as Salary and Wages or Contractor Payments and can only be run for the current Financial Year. The Revenue Offices will define the categories. The values generated for the reporting period are entered directly into your online Payroll Tax return.
You can find the Payroll Tax Wages Report in Payroll, Reports, End of Pay.
Before you can use the report, you must:
Create Company Groups
Create State groups, including defining the pay components included in the report
Assign a Payroll Tax State to employees
Setting up Company Groups:
To be included, you need to assign Payroll Companies to a Company Group:
Go to Payroll, Maintenance, Payroll Tax, Company Groups.
Click Add.
Enter a Code and Description.
Select Member Group at Group Type for companies that are related for payroll tax purposes. If the companies are unrelated, select Non-Member.
Click Add to add a line to the grid and select the Payroll Company. You can add multiple Payroll Companies.
Then click OK.
Note: Payroll Tax legislation provides for 'grouping' of related companies. Contact the State Revenue Office for more information.
Creating Payroll Tax State:
A Payroll Tax State defines the Pay Components and Employment Types to be included in the report. You can also specify fixed values for amounts that are calculated outside of payroll, e.g. Fringe Benefits. If you set up a fixed value, you may need to update the value each month before running the report.
Pay Components and fixed values are grouped by the following Categories:
Allowances
Apprentices and Trainee Wages
Contractor's Payments
Employer Superannuation Contributions
Fringe Benefits
Salaries and Wages
Termination Payments
Employment Types from the Employees' Pay Details can be used to create categories. Review your Employment Types to ensure the required ones are available, e.g. Apprentice or Trainee. New Employment Types can be added via the Employee record or Lookup Tables. For more information, refer to the article Lookup Fields.
To create a Payroll Tax State:
Go to Payroll, Maintenance, Payroll Tax, Payroll Tax.
Enter a Code and Description.
Select the State.
Click Add.
Select the Category, e.g. Allowances, Salary and Wages, etc.
Select the Pay Components, Additions/Deductions, Leave Reasons and User Defined Leave that are nominated for the Category by the Revenue Office. Leave Reasons and User Defined Leave will be greyed out unless Other Leave or User Defined Leave, respectively, have been selected in Pay Components.
Select the Employment Type to separate out different types of employment for inclusion in categories, e.g. Apprentices and Trainees can be assigned to their own Category.
For a fixed amount e.g. Fringe Benefit, you enter the amount in Value per Month. This field is available when no Pay Components or Additions/Deductions have been selected.
Click OK.
Repeat steps four to nine for each required Category.
Click OK.
Assigning Payroll Tax to Employees:
Once you have created the Payroll Tax States, you need to assign them to Employees:
Go to Payroll, Maintenance, Employees, Employees.
Edit the Employee.
Click on Pay Details.
Select Payroll Tax.
Click OK to save.
You will need to repeat these steps for each employee.
Assigning the Period End Date to a Month:
You can allocate which month the current Period End Date falls into for Payroll Tax purposes only, either during the End of Pay process or in the Pay Frequency.
When you process End of Pay (Payroll, Transactions, End of Period), you can change the Month field to nominate the Month for the End of Next Period.
You can change the Month in Pay Frequencies (Payroll, Maintenance, General) for the current Period End Date (Processed is unticked) only.
Payroll Tax Adjustment:
You may need to perform a Payroll Tax Adjustment if:
An employee was not allocated to the correct Payroll Tax Code in their Employee record when they were paid.
An employee worked in a different state and the Payroll Tax Code wasn't changed in either their Employee record or the Transaction.
For more information, refer to the article Payroll Tax Adjustment.
Note: Payroll Tax Adjustments are for all pays allocated to the month. You cannot process an adjustment for one pay period.
Run the Payroll Tax Wages Report:
Go to Payroll, Reports, End of Pay, Payroll Tax Wages.
Select Payroll Tax, this is the Payroll Tax State. You can select multiple.
Then select Company Group. You can select multiple.
Enter the From Month and To Month. To run for one month, select the same month in both fields. Any pay period that belongs to the nominated Month will be included in the report.
Select the Display Options:
Summary will display values per Category, Company, Company Group and Payroll Tax State. And include Totals for the Company Group and Payroll Tax. If you leave this unticked, the values will be broken down by Pay Period.
Show Employee Details will list the employees included in each Pay Period per Category. This can't be selected if Summary is ticked.
Show Report Totals will include a Total at the end of the report for all included data.
If you have ticked Show Employee Details, you can select Order By.
Click Print or Preview.
Payroll Tax and General Ledger
If you use the General Ledger Module, review this article for information on how to include Payroll Tax Percentages to assist in the calculation of Payroll Tax: