Free guide to correctly handling tax on employee termination payments

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Free guide to correctly handling tax on employee termination payments

Do you employ staff? Are you using QuickBooks? If the answer to both questions is 'yes', Reckon has published a new guide that you should take a look at.

 

If you're the one that does the books at your business, you should know the Federal Government has changed the way Employment Termination Payments (ETP) are taxed.
 
Here is a PDF guide to all this produced by Reckon, the company which supplies Quickbooks software in Australia. It includes links to relevant ATO materials.
 
QuickBooks will not be updated to reflect the concepts of 'included' or 'excluded' payments until the 2013/14 version is released, and that's not scheduled until next April.
 
For now, it is necessary to manually calculate the withholding tax according to ATO rules, and until you update to QuickBooks 2013/14 you'll need to exclude ETP summaries from any electronic lodgements and use paper forms for the PAYG payment summary statement and any PAYG payment summary - employment termination payment that you issue to an employee.
 
To help smooth the upgrade to QuickBooks 2013/14, Reckon recommends you add payroll items so you can separately track the pre July 1983 component, the post June 1983 untaxed element, and the post June 1983 untaxed element (low rate threshold).
 
 
 

 

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