QuickBooks 2005/06 PAYG Tax calculations are incorrect for the 2005/06 Tax year.

Legacy KB ID: 2044

Question

Why is QuickBooks 2005/06 incorrectly calculating the PAYG Tax when processing employees payrun?

Answer

QuickBooks 2005/06 was released during the 2004/05 Tax year, by default contains the 2004/05 Tax Scales.

In late June 2005; Quicken released the 2005/06 Tax scales for QuickBooks 2005/06 and Enterprise 2005/06. To download these scales you must be a current Advantage member or have a current Subscription Licence to QuickBooks 2005/06. Please click on the link below, you will need to have you Quicken user ID and PIN. This information is provided on all documentation sent by Quicken.

https://members.quicken.com.au/Login.aspx?ReturnUrl=%2fDefault.aspx

If you are using QuickBooks 2005/06 and have downloaded and installed the latest Tax scales, you should be calculating the PAYG Tax correctly. If for any reason you believe the tax is incorrect; you will need to confirm this with the ATO prior to contacting us. The ATO have provided an online PAYG Tax Calculator. See link below.

https://www.ato.gov.au/scripts/taxcalc/calc_standard_hire.asp

It's important to note; when using the online ATO Tax calculator you need to choose the exact calculation preferences as those you have specified in QuickBooks for that employee in the Tax Detail window.

A Note about Super!

Super is most likely configured to affect PAYG. This will result in PAYG being incorrect. Check the superannuation payroll item setup.
1) Go to the Lists drop down menu and select Payroll Item List.
2) Double click on your Super payroll item.
3) This will take you through a setup wizard. The fourth screen to appear headed Taxes will have an option to have the employer contribution to be added to wages before calculating PAYG Tax. You should have this unticked so that Tax isn't being calculated on the Super amount.

A common error users make is choose a Tax scale for the Employee and compare the ATO tax calculator based on different preferences. QuickBooks has a built in explanation to the various Tax codes used for PAYG Tax withholding. See QuickBooks Tax Table Information;

1. Click on the Employees menu and choose Tax Table Information
2. Click on the Tax Table Info

NOTE! Please do not contact our Technical Support team to inquire about Tax legislations or to which tax code you should be choosing for individual employees. As an employer you should be familiar with the information available on the QuickBooks Tax Table Information window described above. Further information can be found on the ATO or through your Accountant.

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