How much HECS debt is deducted for employee in MYOB essentials

[stucoleman]

Hi,

I'm using MYOB essentials and have an employee who doesn't have much HECS/HELP debt remaining and so asking how much is being deducted each payslip to understand when it will finish. The right checkbox has been checked under her employee tab so I'll assume the correct payments are being taken out, but there's no mention of it in her payslip. So how do we know it's correct and what amount it is?

Thanks,

Stu

[Steven_M]

Hi @stucoleman 

MYOB Essentials will show the one PAYG Withholding amount on an employee's payslips/payroll transaction. This is would be a combination of the actual PAYG amount and any other tax deductions such as HECS.

If you are needing to ensure that the PAYG amount that MYOB Essentials is calculating correctly, I would recommend checking out the online ATO PAYG Calculator.

[stucoleman]

Thanks Steven_M, it unfortunately doesn't answer my question though, I'm trying to understand how much HECS is being deducted. I understand it's part of the PAYG withholding, but how much of that amount is contributed to HECS?

I've used the ATO PAYG calculator and confirms the same PAYG withholding amount as well, doesn't say how much HECS would be coming out either.

This seems like a straightforward question/answer I'm not sure why this is hidden everywhere?

Cheers, Stu

[gavin12345 · Accepted solution]

Hi @stucoleman 

The ATO produces printed tax tables. If you compare the PAYG to be deducted from the 2 different tax tables (one with HECS and one without) you will see how much extra is being deducted due to a HECS Debt. The rate varies with the level of gross pay.

Now while an employer is obliged to deduct extra tax to cover HECS, this does not go specifically to reduce the HECS debt. The HECS debt is only reduced when the employee lodges their income tax return. It is at this point that the ATO works out how much the employee is obliged to repay for this year. If they are not required to repay any HECS (taxable income for the year below the repayment threshold), all of the extra tax deducted by the employer will be refunded to the employee. Or if more was deducted than was required to pay off the HECS debt, the balance will be refunded.

Regards

Gavin