When Payroll Tax values are being calculated, the system will check whether exemptions have been configured in the following places:
- Pay Item
- Superannuation item
- Deduction item
- Contribution item
Pay data that has been marked as ‘Payroll Tax Exempt’ at the time that a pay run is marked as paid will not be factored into any Payroll Tax calculations.
Exemption settings are stored in the raw data .csv file at the time that a pay run is marked as paid. Changes made to the exemption configuration of a pay item, job, supplier, customer or entity will not apply retroactively to pay runs that are already marked as paid.
Configure Payroll Tax Settings in an Entity
You will need to configure the Payroll Tax settings for each entity. These settings manage whether the entity is liable for Payroll Tax and whether a Payroll Tax Threshold should apply.
Go to Config > Company Management > select the entity > Payroll.
Under Payroll Tax Settings, tick ‘Entity is Liable for Payroll Tax’ if Payroll Tax should be calculated on pay data in the entity.
- If the checkbox is ticked, you will see an additional row to indicate whether Payroll Tax Thresholds should apply for your entity.
- Tick ‘Claim Payroll Tax Threshold for this Entity’ if the thresholds should apply.
Leave the checkbox unticked if the threshold does not apply for the entity.
To include contractor earnings in Payroll Tax calculations, you will also need to 'Enable Payroll Tax for Contractors'. If you are calculation Payroll Tax for contractors, ensure that the Workplace State is entered on the contractor's job so that Payroll Tax can calculate correctly.