Tax & Annual leave

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Contributing Cover User DebbieU
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Tax & Annual leave

This year we are closing our business over the Christmas, New Year break for 3 weeks.  This being a total of 90 ordinary hours and 24 Public Holiday Hours.

 

I have been told that I should be paying the employees holiday pay WEEKLY, so as to reduce the amount of tax they pay.  I have not done this before, and have paid annual leave  based on 90 Ord Hours and 24 Public Holiday hours.

 

Could someone tell me if I am wrong doing AL payments this way?  As we have already paid all the Employees their Leave.

 

Thanks in Advance,   Deb

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MYOB Moderator Neil_M
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Re: Tax & Annual leave

Hi @DebbieU

 

If the employee was going to be paid strictly annual leave for the entire week then you can use the functionality in AccountRight to Pay Leave in Advance. This allows you to create one pay for multiple weeks.

 

In contrast if you were wanting to record each week separately, then you would have to record each one separately. Depending on what the employee was doing in the real world should be mirrored on the pay. So if for example the employee was taking 50 hours of annual leave then the employee’s pay should ideally reflect this with 50 hours of annual leave paid out.

Regards,
Neil

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Ultimate Partner DuncanS
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Re: Tax & Annual leave

@DebbieU @Neil_M

 

Debbie,

 

It would be best to do three weekly pays.

 

Otherwise, you could override the amount of tax calculated by MYOB.

It is unlikely to be three times the weekly tax.

The net pay should be three times the normal weekly net.

 

I understand you have a 38 hour week.

The Annual Leave Category should be used.

Check the Annual Leave Accrual has reduced by 90 Hours.

 

Duncan 

Duncan Smith
Business Advice + Tax
Helping business owners build a better business since 1998
E expressgst@optusnet.com.au T 02 9904 3672 7 days
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