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What ATO Reporting Category Option for HECS/HELP?

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Experienced Cover User SandieW50
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What ATO Reporting Category Option for HECS/HELP?

Hi,

 

I have an employee who has a HECs debt.  I have set this up as a deduction, with the balance going to the PAYG Balance Sheet account as it is really just extra tax.  However, the only ATO reporting options that I can select for deductions are:

 

To be assigned
Not reportable
Deduction - Union
Deduction - workplace giving
 ETP - Tax Withholding
 
As HECs is really just additional tax none of these options for STP reporting are really correct and the tax is not going into the PAYG on the ATO report.  Do I need to setup the HECS under 'Taxes'?
 
Thanks
Sandie
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Ultimate User gavin12345
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Re: What ATO Reporting Category Option for HECS/HELP?

Hi @SandieW50

 

The normal approach is to simply attach the employee to the correct tax table (Card List > Employees > Payroll Details > Taxes). If they are attached to a tax table with HECS/HELP, MYOB will simply deduct extra tax if required. This tax is reported in the normal manner as PAYG Withholding.

 

Employers and employees need to understand that the extra tax does not necessarily actually go against their HECS/HELP debt. As an employer you simply have to deduct extra tax. When the employee completes their tax return, only at that point is a liability for HECS/HELP repayment determined. If they are not liable as annual taxable income is below the threshold, any extra tax will be refunded to the employee.

 

Regards

Gavin

 

 

Ultimate Partner IanChait
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Re: What ATO Reporting Category Option for HECS/HELP?

Hi @SandieW50

 

Just to re-iterate what @gavin12345 has said.

 

You do not set up a seperate deduction category for HECS/HELP, you simply select the correct Tax Table that includes HECS/HELP in the Employee Card.

 


Regards
Ian Chait CA
Certified Consultant Melbourne
P/M 0417 479 585
Email ian@myfc.com.au

Experienced Cover User SandieW50
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Re: What ATO Reporting Category Option for HECS/HELP?

Hi Gavin,

 

I understand what you're saying and my next question is how do I put this right so it appears correctly on the STP report? 

 

I currently have an amount shown as a deduction whereas it should be PAYG.  I need to make sure the correct PAYG is reported for year end for the employee although from what I have read when the employee lodges his tax return he will probably be able to correct the PAYG amount himself.  There is also the BAS to consider.

 

Thanks

Sandie

Ultimate User gavin12345
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Re: What ATO Reporting Category Option for HECS/HELP?

Hi @SandieW50

 

 

Each time you send routine payroll STP data  to the ATO, it replaces whatever you previously sent for this employee. So fix in MYOB, (delete payroll and re-enter) and next time you transmit STP the empoyee's data will be replaced with the new data.

 

I am not aware of any other way to report a deduction as PAYG, so all I can suggest is as per above. Other readers may have more to add.

 

Regards

Gavin

 

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