Working Holiday Maker - income from previous employer

Hi GriffAdmin,

Thank you for your post. Regarding your concern, When the previous employer reported through STP, it will continue with the ATO when transfer. We do recommend speaking with your accountant if you need to record income from your previous employer. You can check out this Help Article: Working holiday makers, has a detailed information. 

Feel free to post again if you have questions or concerns. We are happy to help. 

If my response has answered your enquiry, please click "Accept as Solution" to assist other users find this information.

Kind Regards,

Cel

Hi GriffAdmin,

We hope this message finds you well. May I know if you still need assistance with this? You can contact us again or create a new post if you still have questions or concerns. We are more than happy to help.   

Kind Regards, 

Cel

Sorry for my delay in replying. I only go to the office on Tuesdays so I was going to attend to this tomorrow.

I had already contacted our accountant before raising this question and he suggested that, as a workaround, I find out how much the employee had earned from his previous employer and I enter that in the history section of MYOB. I raised the question in the hope that you had a more defined procedure, rather than a workaround. 

Thanks for the update. We spent substantial time this morning talking with MYOB support, the ATO and our accountant but the solution was inconclusive.

MYOB said that the ATO should have a record of how much was paid by the previous employer and that feeds through to MYOB giving MYOB the ability to calculate the correct tax rate. The gentleman I spoke to was adamant that, if the figure was wrong, the ATO would not hold us responsible for taking too little tax.

The ATO suggested we talk to the employee and see if the previous pay shows up on his MyGov account and, depending on the outcome, we could work out the correct tax rate.

Our accountant, instead, said that we should find out how much the employee had been paid in his previous job and load that into the Payroll Details>Pay History tab. He has now done that and, based on his calculations, MYOB was then able to calculate the correct tax rate, and the Historical figure he loaded did not feed through to the ATO as a payment from us.

I wonder if we will ever find out who is right?

Hi GriffAdmin 

You definitely don't want to do that! (update pay History). While your reported Gross and PAYG might look correct, the employee's Income Statement reported amounts come from the Pay History tab, so you are including in the income statement amounts earned and reported by previous employer. Remove and next reported pay will override previous.

Ignore the advice from MYOB, and advice from your accountant. Most accountants don't know how MYOB works, so unless they use MYOB regularly, you should not get MYOB advice from them. It is just sad when MYOB itself provides incorrect advice.

Bottom Line: As an employer, your legal obligation is to withhold PAYG based on the TFN Declaration provided. For WHM employees, the lower rate applies, until you as an employer pay the employer over $45k. Legally, based on how PAYG has been set up, it doesn't matter that the employee may have earned from other employers. Same applies for all employees - what they earn or earned from other employers does not factor in to your PAYG withholding obligation.

Yes the employee may end up with a tax debt at the end of the year - however you are not responsible for that, the employee is. When submitting their TFN Declaration, the employee can request you take out extra tax. Or they can do this after their total from previous and current employer exceeds $45k. This seems to be what the ATO was indicating.

There is no 'automatic' way to do this in MYOB. So it is up to the employee to keep track of earnings and if they want you to deduct a higher rate before earnings from you reach $45k, they can request this. If you deduct 15% for earnings under $45k you will not be penalised by the ATO.

This has all been covered in previous forum posts, however as MYOB recently sacked almost all experienced support staff, current staff may not be aware of this.

Regards

Gavin

Hi GriffAdmin,

We want to thank gavin12345, for sharing insights to this post and I hope it helps you more with your concern. At MYOB we always wanted to make sure that we assist and provide resolutions to our customers using our tools and our resources. If you still need assistance do not hesitate to contact us again. We are more than happy to help. 

Kind Regards, 

Cel

Thanks @gavin12345 for clearing that up for us. We've passed the information to our accountant as well. 

Hi GriffAdmin,

Thank you gavin12345, for sharing insights and help our customers to resolve the issue. We are now closing this case, If you still need assistance in the future, please feel free to contact us again or create a new post. We are more than happy to help. 

Cheers, 

Cel