Tax is calculated differently depending on the transaction screen you are using.
Termination and Backpays
Termination and backpay transactions use Average Normal Gross and the marginal tax rates to calculate the tax payments.
If an employee has not yet received a pay in the new financial year, the average normal gross does not yet exist and must be entered in the termination or backpay transaction for the marginal tax to calculate.
Termination transaction
To add an Average Normal gross to a Termination Transaction:
Go to Payroll, Transactions, Processing, Termination.
Enter the Employee.
Select the Termination Date and Termination Reason.
Confirm if the payments relate to the current financial year.
Select the STP Cessation Reason.
The Average Normal Earnings will be calculated based on previously processed pays in the current financial year. You can enter or overwrite the Average Normal Gross.
When you tab, the tax associated with the Term Leave Gross pay components and Tax in Pay Summary will update.
Enter any other required pay components and click Process.
Backpay transaction
To add Normal Earnings to a Backpay Transaction:
Go to Payroll, Transactions, Processing, Backpay.
Select the type of Back Pay.
Enter the Employee.
Select either Percentage or Amount for Calculation Detail.
Enter the Start Date and End Date of the backpay period.
Select Percentage or Amount. If you select Amount, select if the amount is Per Hour, Per Auto Pay or Per Year.
The Normal Earnings will calculate the average earnings based on previously processed pays in the current financial year. You can overwrite the Normal Earnings if it is zero or you want to use a different average.
Click Calculate to calculate the amount of Backpay and Tax.
Review the details on Calculation Details, Rates and Transaction Details tabs.
Tick Apply new rates to employee on process on the Rates tab if you want to update the rates on the Employee's record.
Click Process.
Timesheets and Manual Calculations
Tax in Timesheets and Manual Calculation, when Tax is selected in Pay Calculation, calculates tax based on the employee's details and the Gross Taxable value in the current transaction. They do not take into account other transactions included in the period or transactions for previous periods.
If tax hasn't calculated check the following:
Employee's tax details are correct.
In Manual Calculation, Tax is selected in Pay Calculation.
If the employee is claiming the tax-free threshold, is their Gross Taxable value over the threshold for the frequency?