Pay an employee return to work payments

The withholding tax for Return to work payments is 34.5% for all employees. The Reckon Payroll app allows you to configure Earning Items for return to work payments so the withholding tax will be calculated and correctly reported to the ATO when submitting STP.

Configuring return to work payments

Return to work payments are configured as Earnings items and need to have the Tax applicable rate Return to work selected for the payment to be correctly reported. The ATO Reporting the amounts you have paid website provides details on what payments are classified as return to work.

To configure Return to work payments:

  1. Create a new Earning item (see Manage Earning items for step by step instructions).
  2. Pay type configured as Variable
  3. Tax applicable configured as Return to work

Paying return to work payments

To pay Return to work payments the Earning item needs to be included in a Pay run. This can be done by adding the item to an employees pay details in a pay run, or having it as a part of the employees pay setup.

When an Earning item with Tax applicable set to Return to work is included in an employees pay details a PAYG tax item Lump sums will be appear with the tax calculated at 34.5%.

Updating the tax withheld for return to work payments

To update the tax withheld for an Earning item with Tax applicable set to Return to work:

  1. Tap the Lump sums tax item
  2. Update the Tax amount
    For information on how to calculate the tax to be withheld see ATO website Schedule 4 – Tax table for return to work payments
  3. Tap Done

Need more help?

Ask the Reckon Community at: https://community.reckon.com/

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