Payroll Tax Low Rate Threshold is incorrect in Payroll Premier

Legacy KB ID: 3717

Question

Why doesn’t the Payroll Premier calculation of tax in an Eligible Termination Payment (ETP) match that calculated on the ATO worksheets?

Answer

This problem will be encountered where the super lump sum payment is above $150,000. 

One element of the Eligible Termination Payment is the tax-free threshold for Super lump sum payments.  This amount changes from year to year.  From 1/7/2010 the ATO has set the low rate threshold at $160,000.  The default amount in Payroll Premier is $150,000.

For further details on processing Eligible Termination Payments and an explanation of the relevant tax rates, users should consult their Accountant and the ATO. 

 

 

Solution

 

Change the Low Rate Threshold in Payroll Premier

1.    On the top menu line click on File then Preferences then Tax;

2.    In the Low Rate Threshold box, replace $150,000 with $160,000 and click Save.

 

You can now balance the Payroll Premier ETP calculations with the ATO worksheet. 

 

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