Managing Taxation Processing

This chapter provides an overview of taxation processing for Australia and discusses how to:

Enter payee tax data.
Update payee tax scales automatically.
Run the tax file number (TFN) declaration.

Note. The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Australia. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll 8.9 PeopleBook.

Understanding Taxation Processing

The Australian country extension to Global Payroll comes with all the elements required to calculate a payee’s tax correctly. The system calculates the tax for a variety of scenarios, such as multiple payments within a calendar period, annualized tax, midperiod hires, and terminations.

As well as entering details about the pay entity (usually a company or organization), you must provide the Australian Tax Office (ATO) with TFN information. You need to enter and maintain tax-related information about each employee and submit statutory reports to the ATO.

Entering Information for Tax Processing

The correct calculation and reporting of tax depends on the employee data that is stored in the system.

Pages Used to Enter Information for Tax Processing

Page Name	Object Name	Navigation	Usage
Payee Tax Data	GPAU_EE_TAX_DTLS	Global Payroll & Absence Mgmt, Payee Data, Taxes, Maintain Tax Data AUS	Enter individual payees’ tax data.
Tax Scale Update	GPAU_RC_TX01_SQR	Global Payroll & Absence Mgmt, Payee Data, Taxes, Review/Update Tax Scales AUS	Report employees’ tax scales or update the tax scales if the TFN exemption expiry date has passed.

Entering Payee Tax Data

Access the Payee Tax Data page.

To calculate a payee’s tax, the array TAX AR EE TX DTL retrieves each payee’s tax data. If you have not entered all the data required, an error message indicates that payee tax information is required.

TFN Status	Select the status. Options are: Applied: The payee has shown on the employment declaration that there is an application for a TFN. The system adds the current date as the TFN exempt start date and a date 28 days later as the TFN exempt end date. In the interim, the system displays 111111111 as the payee’s TFN. Note. The exempt start and end date fields are unavailable for all statuses except Applied and Not Supp (not supplied). F/P Pens (full or part pension): If the payee is on a full or part pension, the employee is exempt from providing a TFN. The system displays 444444444 as the payee’s TFN. Incrct TFN (incorrect TFN): If the payee has supplied an incorrect TFN, the system does not allow you to enter a TFN. Not Supp (not supplied): If the payee has not supplied a TFN, the system adds the current date as the TFN exempt start date and a date 28 days later as the TFN exempt end date. In the interim, the system displays 000000000 as the payee’s TFN. TFN NotReq (TFN not required): Used when a TFN is not required; for example, for contractors. The system displays 000000000 as the payee’s TFN. TFN Prov (TFN provided): The payee has provided a TFN. After you enter the TFN, the system hides the entry, displays Entered in the field, and displays a Re-Enter TFN button. If you enter an invalid TFN, the system warns you. To re-enter a tax file number, click the Re-Enter TFN button. If an interim notice is in force for the employee, select TFN Provided and enter 222 222 222. Under 18: An employee under 18 years of age is exempt from quoting a TFN. The system automatically displays 333333333 as the payee’s TFN.
Tax File Number	Enter the TFN number. Validation occurs, and you receive a warning message if the number fails validation.
Re-Enter TFN	This field is available until you enter a valid TFN. Use it to enter a different TFN if the number that you enter fails validation.
TFN Disclose to Superannuation	Select this check box to indicate that the payee has authorized you to disclose the TFN to a superannuation organization. There is no processing associated with this check box. You can use it when reporting to a superannuation provider.
Pay Entity	Enter the pay entity to which the payee supplied the tax file declaration.
Balance Group No (balance group number)	Use balance group numbers to identify the accumulator in which the system stores tax balances. You can only select balance group numbers entered for the employee on the Job Data - Payroll page.
Tax Scale	Enter the tax scale. Options are: 1: Tax Free Threshold Not Claimed 2: Tax Free Threshold Claimed 3: Non Residents 4N: TFN Not Provided - Non-Resident 4R: TFN Not Provided - Resident 5: Full Medicare Levy Exemption 6: Half Medicare Levy Exemption 7: Tax Free Threshold (No Loading) 8: Seniors - Single 9: Seniors - Separated by Illness 10: Seniors - Member of a Couple
Basis of Payment	Select the basis of payment. Options are Casual, Full Time, Labour Hire, and Part Time.
HECS	Select if the payee has an HECS debt.
SFSS	Select if the payee has an SFSS debt.

Medicare Levy Details

Calculate Levy Adjustment	Clear this check box to prevent the system from calculating Medicare levy adjustments. By default, the check box is selected. If you do clear this check box, the system does not process any other selected options in the group box.
Spouse	Select if the payee has a dependent spouse only.
Combined Income	Select if the payee and spouse’s combined income is less than the threshold.
No. of Dependents (number of dependents)	Enter the number of dependents, including the spouse if the spouse is a dependent.

Rebates

FTB Rebate	If the payee is applying to have this benefit paid by reduced withholding tax, enter the amount of the reduction that the payee is requesting.
Other Rebates	If the payee is applying to have combined dependent-spouse, special, or zone rebates paid by reduced withholding tax, enter the amount of the reduction that the payee is requesting.
Total Rebate	The system displays the total of the FTB and other rebates.

Tax Adjustment

PAYG Adjustment

A check box exists for each type of tax: PAYG, Annualised, HECS and SFSS. Select the check box for each tax for which you want to make an adjustment. This makes the adjustment fields available for entry. For each tax, you can set an adjustment of override percentage or amount, or an adjustment of additional percentage or amount.

Contractor Details

Contractor	Select if the payee is a contractor.
ABN	If you select Contractor, enter the ABN. The system warns you if the number that you enter is not a valid ABN.
ABN Branch	If you select Contractor, enter the ABN branch

Declaration

Signature Present	Select if the payee has signed the tax declaration form.
Date Signed	Enter the date that appears on the declaration.

Updating a Payee’s Tax Scale Automatically

When you hire a new payee and select a tax scale, that tax scale might need to be changed. When people apply for a TFN, they have a 28-day exemption period. If they a TFN is not entered in the system before the expiry of the 28 days, the tax scale must be reset. You can run a process to have the system do this for you. The GPAUTXO1.SQR process checks the TFN status to determine if it is Applied or Not Supp (not supplied). If the 28 days have expired, the system performs the following actions:

Inserts a new effective-dated row of status Not Supp (for both Applied and Not Supp).
Sets the exempt start and end dates to null.
Resets the payee’s tax scale to 4N or 4R.

To create a report of only employees whose tax scale needs to be changed—for example, if you want to change them manually—you can use the process page to generate the report without making automatic updates. To create a report only, clear the Update Employee’s Tax Scale check box.

Submitting the Electronic TFN Declaration

The output of the GPAU_TFN_ELC Application Engine process is a magnetic media file for submission to the ATO.

The TFN declaration has five parts:

Supplier information, which is generated from supplier data.
Payer information, which is generated from the Entering Additional Tax Information page.
Payee information, which is generated primarily from the Entering Payee Tax Data page.

It includes the TFN, name and address, terminated flag, residency status (from the tax scale), basis of payment, tax-free threshold claimed, and FTB claimed.
Software information.
File total.

Note. The information that you enter on the tax information pages is included in the following files, which you submit to the ATO: the Group Tax file, the Payment Summaries file, and the TFN Declaration file.

Pages Used to Submit the Electronic TFN Declaration

Page Name	Object Name	Navigation	Usage
TFN Declaration - Electronic	GPAU_RC_TFN_ELEC	Global Payroll & Absence Mgmt, Taxes, Create TFN File AUS	Set the report start and end dates and select the pay entities for the report. You can also specify a run type of Production or Test.