Summary

PayGlobal contains special tax codes for aged pensioners and low income, senior Australians.

In employee records, the Payroll | Tax tab | Tax rate field includes the following options:

• L1 - Low Income aged person - Single
• L2 - Low Income aged person - Illness separated
• L3 - Low Income aged person - Member of a couple.
• L1 F - Low income aged person - Single - Full Medicare Exemption
• L2 F - Low income aged person - Illness Separated - Full Medicare Exemption
• L3 F - Low income aged person - Member of a Couple - Full Medicare Exemption
• L1 H - Low income aged person - Single - Half Medicare Exemption
• L2 H - Low income aged person - Illness Separated - Half Medicare Exemption
• L3 H - Low income aged person - Member of a Couple - Half Medicare Exemption

PayGlobal does not validate these new tax codes against the employee's Date of birth value; you need to manually identify eligible employees.

Employees qualify for these special tax codes if they are:

• At least 65 years old and male

  - or -

• At least 63 years and 6 months old and female

  - or -

• At least 60 years old, male, and a Department of Veterans’ Affairs (DVA) veteran receiving a service pension or war widowers receiving an income support supplement

  - or -

• At least 58 years and 6 months old, female, and a Department of Veterans’ Affairs veteran receiving a service pension or war widows receiving an income support supplement.

Identify Eligible Employees

Before you open the first pay in the new financial year:

• Run the Employee Birthday Report (Master File report group) to identify employees who fit the age criteria. However, Employees | Personal (i) tab | Date of birth is not a mandatory field in PayGlobal, so this report may not identify all age-eligible employees.
• Use information recorded outside PayGlobal to identify employees who are receiving a DVA pension or income supplement; PayGlobal does not record these details.
• Use information recorded outside PayGlobal (employee's Medicare Levy Variation) to determine whether an age-eligible employee is claiming a Medicare levy exemption, and also the quantity of the exemption (half or full)

After you identify eligible employees, ensure that you attach them to the correct Tax rate code (L1, L2 or L3 [no Medicare levy exemption], L1 F, L2 F, L3 F [full exemption], L1 H, L2 H, L3 H [half exemption] ).

Note: After the employee's weekly pre-tax earnings exceeds the income cap applicable to the Senior Australians Tax Offset, these codes should no longer be used. At that point, the tax withheld is the same as employees who do not fit the eligibility criteria. The income cap may change annually so we recommend that you check employees on these codes every time the income cap changes. The reduced tax rates are intended for low income, senior Australians so they do not apply to those on higher incomes.