ETP Payment Summary created in QB2011/12 and earlier has a different amount of tax in QB2012/13

Legacy KB ID: 4661

Question

Why does an old ETP Payment Summary show a different amount of tax in the 2012/13 edition of QuickBooks?  The tax no longer matches the actual amunt of tax deducted in the final pay. 

Answer

You will experience this issue because the rates for the different ETP Payroll items have changed. 

The ETP tax rates are different to normal PAYG income tax rates.  They are embedded in the ETP Payment Summary itself and do not use the tax amounts applied in the final payment.  The user must enter the correct amount of tax during the final payment so that final pay details conform to the ETP Payment Summary.

In 2011/12 and earlier, the Post June 1983 Untaxed Element (Low Rate Threshold) applied a 16.5% tax rate and the Post June 1983 Untaxed Element applied a 31.5% tax rate. 

In 2012/13, the Post June 1983 Untaxed Element (Low Rate Threshold) will now apply either 16.5% or 31.5% according to the age of the employee.  The Post June 1983 Untaxed Element now applies a 46.5% tax rate. 

 

Workaround

EITHER: open a copy of your company file in the 2011/12 version of QuickBooks and print the ETP Payment Summary.

OR: in 2012/13, modify the final pay for the employee to use the new definitions of the ETP payroll items:

·         For amounts below the cap, enter ETP payments into the Post June 1983 Untaxed Element (Low Rate Threshold) payroll item.  You must have the correct date of birth of the employee entered in the Employee Record.

 

·         For amounts above the cap, enter ETP payments into the Post June 1983 Untaxed Element payroll item. 

 

·         To alter an existing pay you must first click on Unlock Net Pay on the Review Paycheque screen.  If this pay is in a closed-off period, you will need the Admin User to enter a password to allow the change. 

 

Additional Information

For a guide on processing ETP payments in QuickBooks 2012/13, see https://kb.reckon.com.au/issue_view.asp?ID=4495.

 

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