Medicare levy surcharge 1% - additional withholding

Question

I have a new employee who has elected for an additional 1% tax withholding to cover any Medicare levy surcharge for this financial year. I don't see an option to do this in AccountRight. I know there's a field for Extra Tax as a $ value, but not extra tax as a %.

Please advise what I should do. Thanks!

I have attached a screenshot of the employee's Tax withholding and medicare levy variation selections.

ianchait · Accepted Answer

Hi&nbsp;lauracau&nbsp;&nbsp;I think you are now on the right track. Calculate the % of income, and then divide by number of pay periods and use the result in the extra tax field.

lrbooks61 · Answer

Hi&nbsp;&nbsp;The usual Medicare levy is 2%, So i think that they are requesting a reduction in the levy&nbsp;Select&nbsp; Half medicare exemption in taxes&nbsp;Check that that is what the employee is after&nbsp;Hope that helps&nbsp;Lisa&nbsp;&nbsp;

lauracau · Answer

Thanks for your input, Lisa. But it's not a reduction request. They have elected for additional withholding as they do not have private health insurance and will be earning more than $90k.&nbsp;

lrbooks61 · Answer

I would set up a deduction as per the attached file&nbsp;Allocating to PAYG set up as 1% of gross&nbsp;Hope this is more useful&nbsp;Lisa

lauracau · Answer

Thanks again Lisa. Using the 'deduction' option looks good, but it doesn't allow me to select an appropriate category for STP reporting. I think I'll just have to manually add it in as Extra tax.&nbsp;&nbsp;CheersLaura

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Medicare levy surcharge 1% - additional withholding

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