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Hoping someone can clarfiy for me, I have a final pay to prepare and the employee's position was made redundant, however due to being less than 15 employees they do not have to pay a redundancy amount as such out, just the period of notice. In good faith they are making a payment = to a number of weeks.
All my research on the ATO site suggests that I tax at the marginal rate (ie leave MYOB to do the calculating) or do I make an adjustment for the period of which it should be over (11 weeks so 5.5 fortnights) . when I ring the ATO I get bounced around all different areas but no one can seem to give me an answer. Has anyone done anything similar , tha could point me in the right direction ?
Solved! Go to Solution.
Generally I would recommend speaking to the ATO in relation to Payroll tax matters, however since they are giving you the run around perhaps @Julie_A_C or @Seattle or @ronatbas or other users can offer some advice on this for you.
In terms of AccountRight if required you can click into the PAYG Withholding line on the Pay Employee window when processing the payroll for an employee and overtype the value to make the necessary changes.
Thanks Steven ,
I ended up receiveing help from the ATO after 55 mins and 4 different people found someone that could help me. I wasn't sure how to makrk as solved.
Accounting for Payroll can be complex.
There was a keen interest in a similar post on the Community some months ago.
My preference was to tax at the 2016-17 tax rates provided by the ATO (as attached).
By example, an employee was on $60,000 and had leave entitlements/lieu of notice of $10,000.
I would tax the $10,000 at 34.5% including Medicare
You would refer to SGR 2009/2 to determine which components of the $10,000 has 9.5% SG.
Unused Leave does not have 9.5% SG.
Would be interested to hear what the ATO had to say.
I am not surprised that the ATO could not give you the answer straight up which can be frustrating and time consuming.
Can you share what the outcome was for processing Redundancy. There is a tax free component but did they advise to pay Super or not. I would assume that it is not OTE so no super as well as no tax if under the threshold.
Also did you have any Unused Long Service Leave to pay out and if so, can you confirm that the tax on this is 32%?
Your sharing would be helpful.