Employees ETP and tax withheld not recorded in STP figures

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Employees ETP and tax withheld not recorded in STP figures

One of our employees received an ETP for unused RDO's that were paid out when he left. These were taxed at a special rate of 32% as required. Based on the MYOB instructions for recording these payments I set up a wages category for Unused RDO's Paid Out and a deduction for ETP tax payable (there is no provision to add other tax categories) and I processed his termination pay.

 

When I run a payroll activity detail report the total value of RDO's paid out ($1428) is included in his gross wages total but the tax deducted ($457) is shown separately as a "deduction" and it isn't included in the total tax figure. When I compare these figures to the YTD total in STP EOFY Finalisation figures, neither the ETP amount nor the tax deducted are included in gross wages and PAYG withheld.

 

This doesn't seem right. Shouldn't both of these amounts be included in the info that gets reported to the ATO. Have I done something wrong when processing the wages for this person? Thanks

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Re: Employees ETP and tax withheld not recorded in STP figures

Hi @Llewellyn 

 

Thanks for your post. You're right that these amounts should be reported to the ATO through Single Touch Payroll (STP). The first thing I'd check is that those payroll categories have been assigned the correct ATO reporting category. The ETP Tax Withheld amount should be reported separately from PAYG Withheld on the STP report and would generally be assigned the ETP - Tax Withholding category. 

 

These help articles will assist with checking the ETP payment setup and payment:

Assign ATO reporting categories 

Create ETP payroll categories 

Record the final termination pay 

 

Please let me know if you need further help.

 

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

Cheers,
Tracey
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Re: Employees ETP and tax withheld not recorded in STP figures

Thanks for that Tracey. I've made those changes. Can I just go back and delete the previous payment and re-enter it so that the amounts end up in the right place?

 

Regards, Carl

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Re: Employees ETP and tax withheld not recorded in STP figures

Hi @Llewellyn 

 

You sure can delete and reprocess that payment. If you have any further issues please let me know.

 

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

Cheers,
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Re: Employees ETP and tax withheld not recorded in STP figures

I've just got around to re-doing this persons termination payment after setting up the new categories etc outlined in the links. I was a bit confused re the ETP type options but finally worked out how to make it a type O ETP. I've deleted my original attempts and entered a final (I hoped) correct entry using the correct ETP type. 

 

But when I download a pdf of the persons payment summary it shows an amount of income and tax for both Type O and Type P. The amount shown as Type O is double the Type P amount (which shouldn't even be there). And the ETP tax payable is still showing up in the deductions column rather than the tax column when I run a Payroll Activity Summary. Something's gone wrong - how can I fix it please? Thanks

 

Should I attach a pdf of the payment summary to highlight the issue?

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Re: Employees ETP and tax withheld not recorded in STP figures

Hi @Llewellyn 

 

When you delete and reprocess a termination pay that includes an ETP you also need to delete that ETP from the Payroll Reporting Centre by doing the following:

 

  1. Click Payroll in the command centre
  2. Click Payroll Reporting 
  3. Click Payroll Reporting Centre 
  4. Click Employee Terminations tab 
  5. Find the employee and click the 3 dots next to their name 
  6. Select "Remove ETP" 
  7. Select the duplicate payments 
  8. Once it is removed then process a $0.00 payrun for the employee to update the ATO of the new YTD totals

That should resolve your first issue. As for the second issue, when you created the ETP Tax Withheld category you created it in the Deductions tab so it will appear in the Deduction column in the Payroll Activity and Register reports. 

 

Please let me know if you have further issues.

 

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

Cheers,
Tracey
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Re: Employees ETP and tax withheld not recorded in STP figures

Thanks Tracey. Is it possible to add a new tax categoryfor the ETP Tax Withheld? The drop down box only shows PAYG Withholding and as far as I can see there is no way to add extra categories. Googling doesn't come up with any answers about whether it can be done. Do I just have to leave the tax on the ETP as a "deduction" and add it to the tax amount when I complete the BAS? Thanks

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Re: Employees ETP and tax withheld not recorded in STP figures

Hi @Llewellyn 

 

The ATO reporting categories need to be assigned according to the ATO guidelines, so the tax on that ETP payment does need to be reported as a deduction with the reporting category ETP - Tax Withheld.

 

With regard to your BAS, you need to select the ETP - Tax Withheld category in the set up for the W2 field. This will pull that amount into the BAS figures.

 

Please let me know if you need further help.

Cheers,
Tracey
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Re: Employees ETP and tax withheld not recorded in STP figures

Thanks Tracey, all fixed now.

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