Summary

All companies must have a T. Tax Override type allowance. This allowance type is used to override tax calculations.

In Australia, tax overrides are required to complete a termination payment.

In the UK, tax overrides are rarely used to override tax calculations. They are mainly used for advancing tax periods when you pay holiday pay. The T. Tax Override type allowance is also used for National Insurance overrides.

When do you use tax overrides?

Examples include:

• Payment of annual leave that spans more than one pay cycle.
• An employee who has a previous tax debt and is required by law to pay the amounts over and above the normal taxes.
• An employee who has been given permission to claim a tax rebate from a negative gearing claim as they earn.
• An employee may increase their tax payments per pay to cover other income that may be earned, thereby minimising tax liability at the end of the tax year.

Paying field

By default Paying = Yes. When you set up new tax override type allowances, PayGlobal allows you to set the Paying field to either 'Yes' or 'No'. However, PayGlobal does not use this field for any functionality relating to this allowance.

See also

Allowances

Transaction Entry - Taxation Overrides