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AU Payroll - Include commission & bonuses calculation on Schedule 5

Please fix the Schedule 5 PAYG calculation to include YTD commissions and bonuses as well as ordinary earnings. This is causing issues with tax not calculating automatically because the employee's only form of income is from commissions (real estate industry) and they are forced to report it under commissions for STP Phase 2 yet the calculation things they have $0 YTD earnings.

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Lydia Wilson shared this idea  ·   ·  Report…  ·  Admin →
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  • Lara Crowdey commented  ·   ·  Report

    Also add an Earnings category for commission paid in a single pay period, which per the ATO must use the standard PAYG withholding tax tables.

  • Lalaine Hernandez commented  ·   ·  Report

    If the commission is for a specific single pay period and it's their only source of income, should it not be computed using the standard PAYG withholding tax table? And not the PAYG on Schedule 5? Please refer to the ATO statement below:

    https://www.ato.gov.au/rates/schedule-5---tax-table-for-back-payments,-commissions,-bonuses-and-similar-payments/?page=2

    If a commission, bonus or similar payment relates to work your employee performed for more than one pay period (or for an undefined period), calculate withholding by applying either Method A or Method B(ii).

    Do not use this schedule for payments for a single pay period.

    If the commission, bonus or similar payment relates to work your employee performed in a single pay period (for example, a week, a fortnight or a month) the amount is added to all their other earnings for the current period. Withholding is then calculated using the standard PAYG withholding tax tables.

  • Kate Flower commented  ·   ·  Report

    Completely agree with this. We work with a number of real estate clients and commission is their only income yet Xero will not automatically calculate the withholding based on schedule 5 because they have no OTE. Please update this Xero!

  • Karen Makrikostas commented  ·   ·  Report

    Absolutely agree with Lydia Wilson's post - this is a major nightmare with the introduction of STP2. Back to manual calculations in 2023?!

  • Patrick Mead commented  ·   ·  Report

    Agree, this needs to be fixed immediately as it is going to cause huge issues for employers and employees in any commission based industries from a payroll standpoint.