Stopping holiday pay from being taxed separately when a pay is created (New Zealand)

When a pay is created, the option "Tax Holiday Pay" should have the "With Other Pay" field selected by default. Occasionally there can be an occurrence that is "out of the ordinary", such as an error, that can have an impact on these settings. This occurrence can cause the"Tax Holiday Pay" setting to change to "Separately" as the default setting for an employee.

Due to changes to IRD specifications when paying Holiday Pay, these options are only applicable for employees set to 'Percentage Entitlement Only'.

Holiday Pay Tax settings

Paying an employee Holiday Pay when the "Tax Holiday Pay" setting is set to "Separately" will cause the PAYE to be calculated at a lesser value than the employee would normally pay. The Holiday Pay figure is taxed as if it was a pay by itself while the rest of the pay is taxed as if it was a pay by itself. The two PAYE amounts are then added together to get the total PAYE for that pay.

If the "Tax Holiday Pay" setting is found to be defaulting to "Separately" when a pay is created there are two options available:

Manually alter the setting in the Current Pay when any leave is paid in a pay, OR
As this setting is stored in a table in the software, to correct the setting to be "With Other Pay" you should contact MYOB Exo Payroll Support for further assistance.

For the "Tax Holiday Pay" setting defaulting to "Separately" you must do the following steps to revert the setting to the default "With Other Pay":

Make sure you are logged into the payroll company

Do the following if only 1 or 2 employees are affected

Alt-Q
use pay
brow for staff_code=## and paynum=0 (enter the employee code that is affected)
find the hol_taxtog field and correct it by entering .T.
press Enter key then press Esc key
repeat for each employee affected
type in exit and press Enter key

If more employees are affected or you are not sure how many employees are affected

Alt-Q
use pay
replace all hol_taxtog with .T. for paynum=0
type in exit and press Enter key

Need more help? You can open the online help by pressing F1 on your keyboard while in your software.

You can also find more help resources on the MYOB Exo Employer Services Education Centre for Australia or New Zealand.