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Kass_B - Product Champion
Content Creator

How does PAYG calculate if paying an employee on two pay runs with same pay period?

I paid my employee on two separate pay runs but for the same pay period. The PAYG is calculating on the two separate amounts instead of the total amount, how do I adjust this?

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Best answer August 31, 2020

Best Answers
Kass_B - Product Champion
Content Creator

How does PAYG calculate if paying an employee on two pay runs with same pay period?

PAYG is calculated on the earnings entered into a particular pay run. When creating an ad hoc pay run, the PAYG will not update automatically to 'compensate' for other earnings and PAYG recorded in another pay run from the same period and will instead need to be manually adjusted. Example:

 

You pay John $320.00 in pay period 10/08/2020 to 16/08/2020. No PAYG is calculated as John's earnings have not reached the tax-free threshold.

You realise you need to pay John a further $400 and want to record it in the same pay period, but on a different pay run. You create an 'ad hoc' pay run and select the period 10/08/2020 to 16/08/2020. After entering the earnings of $400, $9 of PAYG is calculated on the pay run.

 

In this scenario, John has been paid a total of $700 in the one pay period. The withheld PAYG for a payment of $700 would be $80. However, PAYG is calculated per pay run and as his earnings have been split between two pay runs, the PAYG has been calculated on the separate amounts of $300 and $400. A manual adjustment would be required to withhold the remaining $71:

 

  1. Select the employee's green Actions button, then Adjust PAYG.
  2. Enter the amount to be added as withheld. and a note on the PAYG Adjustment line, then Save.

 

-Kass

View solution in original post

1 Comment
Kass_B - Product Champion
Content Creator

How does PAYG calculate if paying an employee on two pay runs with same pay period?

PAYG is calculated on the earnings entered into a particular pay run. When creating an ad hoc pay run, the PAYG will not update automatically to 'compensate' for other earnings and PAYG recorded in another pay run from the same period and will instead need to be manually adjusted. Example:

 

You pay John $320.00 in pay period 10/08/2020 to 16/08/2020. No PAYG is calculated as John's earnings have not reached the tax-free threshold.

You realise you need to pay John a further $400 and want to record it in the same pay period, but on a different pay run. You create an 'ad hoc' pay run and select the period 10/08/2020 to 16/08/2020. After entering the earnings of $400, $9 of PAYG is calculated on the pay run.

 

In this scenario, John has been paid a total of $700 in the one pay period. The withheld PAYG for a payment of $700 would be $80. However, PAYG is calculated per pay run and as his earnings have been split between two pay runs, the PAYG has been calculated on the separate amounts of $300 and $400. A manual adjustment would be required to withhold the remaining $71:

 

  1. Select the employee's green Actions button, then Adjust PAYG.
  2. Enter the amount to be added as withheld. and a note on the PAYG Adjustment line, then Save.

 

-Kass

View solution in original post