After a recent tax return it has come to our attention that a staff member with no tax free threshold (second job) is not paying enough tax. I have check employee card file and payroll tax table has no tax free threshold selected but say staff member earns 680. The payg withholding tax is only 172. Accountant said this should be taxed at 33% which would be $224.40.
Why is it not taking enough tax when processing pay?
Thanks
Jade
Hi NEPT,
Thank you for your post and welcome to the Community Forum.
Regarding your concern with PAYG withholding tax calculation, if you have set the tax table in the employee card to no tax-free threshold and you are still getting the wrong result, we recommend checking each payroll category used to ensure they were not exempted from PAYG, as this will result in the wrong calculation of PAYG. You can check out this Help Article: Taxes, for more information.
If you need further assistance with this, or if you have questions and concerns, please feel free to post again. We are happy to help.
If my response has answered your enquiry, please click "Accept as Solution" to assist other users find this information.
Kind Regards,
Cel
I brought this to the attention of the ATO and the Tax board in 2020, that the formula they had put out there was now not working for software providers.
In a 'nutshell', the ATO's reply was that the employee could make a payment arrangement for the tax bill!
Go on to their online tax calulator and put an employee as getting $1,500 a week from one employer and see the tax. Then go and do $1,000 from employer claiming threshold and $500 from other not claiming and see what they add to. Then multiply that by 52 weeks if the year to see the shortfall an employee would have if they worked this all the time.
Not good when the employee is hit with that, and they also thinks it is the employers' bad taxing. Not the ATO who is at fault.
