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Report PAYG Withholding on BAS and IAS

SOLVEDby QuickBooks40Updated 1 week ago

If you use QuickBooks Payroll powered by Employment Hero, the amounts you owe in PAYGW (Pay As You Go Withholding) will automatically be added to QuickBooks as a journal entry. This happens after you finish processing payroll.

  • DR to Wage Expense
  • DR to Superannuation Expense
  • CR to Payroll Clearing
  • CR to PAYG Withholdings Payable
  • CR to Superannuation Payable

This article will show you how to:

Before you start

  • In the GST section, you can see the total of all PAYGW amounts for the BAS/IAS period you're filing. You can check this amount before you file your BAS/IAS.
  • Figures for Total salary, wages and other payments and Amount withheld from payments shown at W1 under PAYG tax withheld are imported into the GST using BAS-W1 and BAS-W2 tax codes.
  • The Wage Expense line will need to have a GST code of BAS-W1 for Total salary, wages and other payments, and the PAYG Withholdings Payable line will need have a GST code of BAS-W2 for Amount withheld from payments shown at W1, which will then show within your BAS automatically.

Lodge BAS with PAYGW

When PAYGW is enabled in Tax settings, QuickBooks will create a PAYG Withholdings Payable account, enable BAS-W1 and BAS-W2 tax codes, and enable the IAS or BAS Lodgement.

The reporting frequency you choose will affect how you report PAYGW. If you report IAS, you won't include GST. If you report BAS, you will include GST.

To include PAYG on your BAS lodgement:

  1. Make sure your reporting frequency is set to the same reporting frequency as GST in Tax Settings. After selecting the Prepare IAS or Prepare BAS button in the GST menu, QuickBooks will include a PAYGW stage within the lodgement flow. 
  2. Total salary, wages and other payments as well as PAYG withholding amount figures will calculate based on the period and journal entries using BAS-W1 and BAS-W2 tax codes.
  3. Select the I have other PAYG withholding to report box if you need to report Amounts withheld with no ABN (W4) or Any other amounts you withheld (W3).
  4. Select Next when you are done.

In the Instalment or Business Activity Statement Summary you will then see all lines related to PAYGW are calculated automatically and ready to mark as lodged.

Report PAYGW monthly (IAS) and GST quarterly (BAS) in QuickBooks Online

To enable PAYGW monthly (IAS) reporting:

  1. Select the Tax withheld for employees (PAYGW) box in Tax settings
  2. Set your reporting frequency to monthly. When PAYG monthly reporting is enabled, the first two months of each quarter will display a Prepare IAS button under the To lodge section of the GST Centre
  3. QuickBooks will automatically import PAYGW figures from your payroll journals just for that month, so you can select mark as lodged or even apply a tax payment against your IAS lodgements.
  4. After you have lodged IAS for months 1 and 2 of the quarter, the Prepare BAS option will be available.

When you make a BAS lodgement, QuickBooks will automatically check the GST for the whole quarter. But it will only check the PAYGW figures for the last month.

We're here to help

If you need additional help or have questions, or you require assistance at any point in this process, our Customer Success team is happy to help.

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