Deducting Monies in Lieu of Notice
When processing an ETP, you're usually PAYING the employee monies in lieu if they were terminated by the company, and so we assigned the Monies in Lieu of Notice payroll category to W1 in the Activity Statement fields.
Under our EBA we are able to withhold monies in lieu of notice when an employee resigns without giving appropriate notice, so this is a DEDUCTION rather than a payment.
We processed a termination pay recently where no notice was given and entered a negative amount against the Monies in Lieu of Notice category.
When lodging the May IAS, the W1 amount calculated has not deducted the Monies in Lieu of Notice (see breakdown on the attached Payroll summary report).
Do I need to create a Payroll Deduction (so it is included as a W2 withheld amount) rather than using a negative amount in the Monies in Lieu of Notice Wages category so it will be recognized by STP?Activity statement fieldsCalculated PAYGW W1 amountPayroll summary report
Hi seqtt
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Can you please try clicking on Update from ledger (above Prepare to lodge) to refresh the W1 field. Please let me know if that doesn't work. In the meantime, you can manually change the amount in the W1 field in order to lodge your IAS.
STP uses the ATO reporting categories to report payments so you would need to ensure the correct ATO reporting category is selected for that payroll category. I'd recommend checking the Summary of payments report (Payroll reporting centre>>EOFY finalisation tab>>click on the ellipsis for that employee) to make sure the YTD amounts are correctly reported.
Please let me know how you go.
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