Incorrect calculations on Employee PAYE deductions?

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Experienced Cover User Katiepie
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Incorrect calculations on Employee PAYE deductions?

I have a new employee who stated with us in the second week of our pay cycle. He is on salary with no variations to his pays at this stage.

 

His first pay I processed 40 x hours (of the standard 80 hour pay cycle), and the specified salary rate entered.

 

I did not make any manual adjustments to the PAYE deductions for him as would have expected MYOB Payrol to do so correctly based on his tax code entered.

 

His second pay was today, for a full 2 weeks and pay cycle (80 x hours). No other details changed from last pay except loading "80" ordinary time instead of "40" ordinary time.

 

He has questioned the total take home pay as it differs from what both him and I would have expected to be double a single weeks pay. 

 

I have matched figures against the PAYE.net table and the single week pay he has been "under taxed" according to what he should have had deducted stated on the PAYE table.

 

Can anyone explain this for me? The 2 week pay is 100% correct and matches all totals on the PAYE table. What has the PAYE deduction been less for the first weeks pay through MYOB?

 

I get a concerning message that pops up each oay cycle warning that tax calculations may not be corrrect in our version of Payrol. Yet I have checked through the programme for any potential updates and it says there are none available.

 

Currently using MYOB Payroll 2017.1. Once again I have just checked for a product update and it confirms "No update needed". My team mate is expecting an explanation as to why the tax deductions different from a weekly pay to the fortnightly pay and I have no idea what to tell him.

 

Thanks for your help, feeling rather lost an unconfident with processing pays for our team now.

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Ultimate Partner Mike_James
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Re: Incorrect calculations on Employee PAYE deductions?

Hi @Katiepie, the current version of MYOB Payroll is 2018.1, which you need to upgrade to. Go to your my.myob account and then select My Products, Downloads, and see if it is available there.

 

Alternatively, go to https://www.myob.com/nz/support/downloads and find it there. You must be licensed for any download you make use of.

 

You should be able to manually adjust the amount of PAYE deducted in a future payrun to correct the first weeks pay for this employee. Check that the set-up for this pay code allows changes at pay run time.


Regards, Mike (mike@datawise.co.nz)
DataWise Limited (www.datawise.co.nz), developers of:
DataWise Report Writer - Custom Reporting from MYOB programs
(Including AccountRight Classic/Live, and exo Payroll)

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Experienced Cover User Katiepie
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Re: Incorrect calculations on Employee PAYE deductions?

Thanks Mike!!

Yes in a mad panic I looked elsewhere for updates (outside of the programme that was telling me no, I was current) and found the update so am finally on the correct version.

 

I just did a trial pay for that same employee for "one week" and "two weeks" and the totals came through exactly the same as what he was paid. So I will just have to assume that there is something in the backround for that first week meaning his PAYE deductions were a little less that the fortnightly deductions.

 

Relieved to now be running the correct version - I've asked support on the phone for this before and have been told no i am on the current version Smiley Sad

 

I hope this hasn't casued any other issues for incorrect deductions this year for the other staff. But good to have had this queried today to correct the software issue.

 

Thanks very much!

Ultimate Partner jenniek
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Re: Incorrect calculations on Employee PAYE deductions?

Hi @Katiepie

When you are running fortnightly pays - the MYOB system is calculating tax over the 2 week period. Effectively what you did was pay you employee for 1 weeks pay covering the full two week period - hence why the tax is lower than it should have been. You should have gone into the tax overide button and told the system that the pay was for 1 week only - and the tax would have re-calculated for that pay only.

Yes -agree with @Mike_James - you should be upgrading to 2018.1 because the tax tables are slightly different - mainly to do with student loans and thresholds.

Regards,
Jennie Kingma
JK Business Systems Ltd, Hamilton, NZ
Email: jennie@jkbusiness.co.nz
Experienced Cover User Katiepie
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Re: Incorrect calculations on Employee PAYE deductions?

Hi Jennie.

 

Thank you so much for your reply, that is extremely helpful and explains my issue fully!

 

I have never been trained in Payroll, and having to learn as I go and I have not used the tax override function previously as I don't believe I have had a reason to. I have just set up a trial pay by doing exactly as you explained and it changed the calculations perfectly, as expected.

 

Very greatful for your help!!!

 

And yes, all have finally been upgraded to 2018.1 and I now know not to trust the "check for updates" option within the software, and to look elsewhere in future.

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