Forum Discussion

MF's avatar
MF
Experienced Cover User
5 years ago
Solved

Garnishee order

Can anyone please advice with the setting up of MYOB for a Garnishee order - I have recieved an ATO Garnishee order to deduct 25% off GROSS wages - to enter this into MYOB, would I have to set up a d...
  • mcatt's avatar
    mcatt
    5 years ago

    Hi MF,

     

    As you said in your post, you would need to setup a deduction category (Child Support) and also the associated liability. Perhaps call it Child Support Payable...

     

    In relation to your comment about 25% off gross wage, I believe that to be incorrect. The employee who has to pay the child support is losing more out of there pay if is calculated on gross. The intention is to withhold 25% out of their net pay.... afterall that is what they receive per pay period. Using the example of a gross pay of $1,000, PAYG ordinarily would be $183 (Australian Resident claiming tax free threshold and no other extra withholding). That leaves net pay of $817. Then withhold 25% of the net pay being $204.25, leaving final net pay of $612.75. Compare that to 25% of Gross which means $1,000 less PAYGW of $183 and $250 Child support...net = $567.00. 

     

    In AccountRight, it only gives the option for Gross Wages, but looking more closely, if you click on "Exempt" whilst creating the Deduction item and read what it says there, as long as your PAYG is not ticked on that screen, it should actually dedcut it from your net pay.

     

    Hope i've made sense.

mcatt's avatar
mcatt
User
5 years ago

Hi MF,

 

As you said in your post, you would need to setup a deduction category (Child Support) and also the associated liability. Perhaps call it Child Support Payable...

 

In relation to your comment about 25% off gross wage, I believe that to be incorrect. The employee who has to pay the child support is losing more out of there pay if is calculated on gross. The intention is to withhold 25% out of their net pay.... afterall that is what they receive per pay period. Using the example of a gross pay of $1,000, PAYG ordinarily would be $183 (Australian Resident claiming tax free threshold and no other extra withholding). That leaves net pay of $817. Then withhold 25% of the net pay being $204.25, leaving final net pay of $612.75. Compare that to 25% of Gross which means $1,000 less PAYGW of $183 and $250 Child support...net = $567.00. 

 

In AccountRight, it only gives the option for Gross Wages, but looking more closely, if you click on "Exempt" whilst creating the Deduction item and read what it says there, as long as your PAYG is not ticked on that screen, it should actually dedcut it from your net pay.

 

Hope i've made sense.

  • MF's avatar
    MF
    Experienced Cover User
    5 years ago

    Thank you for your reply, and I will take all of that into acount - I have noticed any other deduction has been on the Net but the ATO lady was quite clear on several times pointing out about it having to be on Gross and the paperwork received also stated Gross. Though it was not for child support so possibly that may be the reason.

    Thanks again.