ETP is calculating 49% in Reckon Account business 2017 R2

Legacy KB ID: 5562

Question

ETP highest Tax rate is calculation @ 49% instead of 47%, in RA2017. How can we fix it?

Answer

ATO has changed the highest rate for the ETP tax to 47% from 49%. This information was passed out little late to Reckon and hence we were unable to update it in time for this Tax table release. We apologise for the inconvenience.

This effects the two categories of tax tracking Type for which you have created the ETP payroll item

1) Post June 1983 Untaxed Element (R)

2) Post June 1983 Untaxed Element (O)

When you create the new ETP payroll item for those tax tracking type and do the termination pay, the ‘Total Tax Withheld’ in ETP PAYG summary is 49% instead of 47%.

Unfortunately, RA does not allow you to edit this tax amount manually to correct it, you will have to adjust the PAYG tax instead, manually for your Regular Pays by the difference to make the overall PAYG Tax calculation correct.

Example

If the employee has

1) Regular PAYG tax of $500

2) ETP Tax withheld is calculated $4900 for $10,000

Here ETP is calculated @49%, where it should be $4700, @47%. $200 is taxed more in ETP. RAB does not allow to edit this amount to $4700 manually.

The workaround is you will modify the other regular pays PAYG amount to reduce $200 manually, so the overall tax effect is correct.

So the new PAYG will be $300 and the ETP tax withheld will remain $4900 and the overall tax is correct.

Please note this is a workaround only you should consider speaking to your accountant for your individual business circumstances.


Need more help?

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