"Tax Holiday Pay" setting defaulting to "Tax Separately" (New Zealand)
When an employee is being paid Holiday Pay as part of the pay for a period, the Holiday Pay would be included with the other earnings in the pay for the calculation of the PAYE for that pay. The Holiday Pay can also be taxed separately to the rest of the earnings in the pay if required.
These situations are controlled by the "Tax Holiday Pay" settings in the Holiday Pay screen of the Current or One Off Pay being processed. By default this should be set to "With Other Pay".
If the Holiday Pay is being paid in a pay and the PAYE is lower than what would normally be taxed for that Gross figure, the "Tax Holiday Pay" setting is most likely showing as "Separately". Correct the setting in this pay to be "With Other Pay" and the PAYE will increase appropriately.
When it is found that the "Tax Holiday Pay" setting for an employee is defaulting to "Separately", the employee's Standard Pay in the Pay table has had the setting changed. The employee's Standard Pay in the Pay table needs to be corrected following the instructions below.
The field "Hol_taxtog" in the Pay table for the Standard Pay of an employee (paynum=0) has changed from "T" to "F", causing the Holiday Pay screen to show the setting as "Separately".
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.