PAYG Tax amount increases after applying Tax Table Update 2012/13

Legacy KB ID: 4588

Question

I am doing my first pay run after the 2012/13 Tax Table Update and I notice that some employees are paying more tax for the same earnings.  I thought that with the rise of the tax free threshold, the abolition of tax concessions on Leave Loading and adjustments to tax scales they will be paying less.  Why?

Answer

You will experience this issue if a Super payroll item has become corrupt after your last pay run in the previous version. 

The PAYG Tax option on the Taxes screen of the super item’s configuration has acquired a tick and will now apply PAYG tax to the super payment.

When you untick this option your change is not saved and PAYG tax continues to be calculated on Super contributions. 

 

Workaround

You can check the correct amount of tax to pay for any employee on the ATO’s Tax Withheld calculator at:  https://www.ato.gov.au/businesses/content.aspx?menuid=5045&doc=/content/33268.htm&page=2

  

1.    Create a backup of your 2012/13 company file;

2.    In QuickBooks 2012/13, delete any affected pays;

3.    create a Portable Company File (companyname.QBM);

4.    Restore this Portable Company File;

5.    In the restored file, edit your super payroll item (Lists > Payroll Items), remove the tick for PAYG Tax and save changes.

  1. Still in Payroll Item Lists, click on PAYG tax and move to the 3rd screen: Include Wages in PAYG Tax.  Scroll down the list and if your Super Item has a tick, untick it.

You should now be able to create these pays with the correct amount of tax calculated. 

 

If the problem persists, then restoring the Portable Company File failed to clean the corruption.  Continue with the following steps:

  1. Create a new super item; 
  2. Replace the old super item with the new super item for all affected employees;
  3. Make the old super item inactive. 

You should now be able to create these pays with the correct amount of tax calculated.

 

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