This chapter includes these topics:
Employees who are Australian residents for tax purposes, and work in another country, are considered foreign workers, and all monies earned while on foreign assignment are considered foreign income.
According to ATO tax regulations, some of these foreign assignments are tax-exempt, while others are taxable foreign income, and must be reported as such. There are two types of taxable foreign assignments:
Standard foreign assignments (foreign employment type F).
Joint Petroleum Development Area (JPDA) assignments (foreign employment type J).
The Australian Tax Office (ATO) requires that all companies in Australia report detailed information about employee earnings on an annual basis by submitting foreign employment payment summaries.
To accurately create foreign employment payment summaries, you can use either of these two methods:
Set up foreign employment date records, enter foreign employment tax information, create foreign pay types and DBAs, and process foreign work through the payroll cycle. The payment summary process then uses the payroll history that is created to generate foreign employment payment summaries.
Complete instructions for using this method are included in this chapter. This method is available in the software as an update to Release 9.1, and is not available in the base 9.1 release.
Set up foreign employment date records, and manually enter data into foreign employment payment summaries.
This method is available in Release 9.1 base software, and is documented in Chapter 10, "(AUS) Processing Payment Summaries"
Some foreign income is still classified as exempt, and is still reported as foreign income on the Individual Non Business Payment Summary.
To create foreign employment payroll history, you must complete these tasks:
Install the software update and perform all post-installation instructions. (Release 9.1 software update only)
Set up tax rules for inputs 10 through 17.
Set up foreign employment PDBAs.
Enter foreign employment date records.
Process the employee through payroll using foreign employment pay types.
See Also:For additional information about the specific tax regulations, and to determine whether the foreign assignments your employees work on are taxable or exempt, contact the ATO directly. In addition, you can refer to these ATO's publications:
State of Principle for Foreign Employment Payments.
Specifications for Self-printing PAYG Withholding Payment Summaries - version 5.1.
How to complete PAYG payment summary - foreign employment (NAT 73298).
In order for the system to correctly process tax information for foreign assignments, you must set up tax rules for these inputs:
Input 10: PAYG Tax
Input 11: Lump Sum A
Input 12: Lump Sum E
Input 13: Pre-Tax
Input 14: PAYG Tax (JPDA)
Input 15: Lump Sum A (JPDA)
Input 16: Lump Sum E (JPDA)
Input 17: Pre-Tax (JPDA)
In order to track foreign employment wages and earnings, you must enter foreign employment tax information on the PDBAs you use to designate foreign employment wages. You must pay employees using these PDBAs in order to generate foreign employment payroll history.
You specify foreign employment information on the Tax Instructions - Australia form, as shown here:
When entering tax information for foreign PDBAs, you typically enter a 1 in only one field in the tax input sections of this form. However, you can enter a 1 in multiple fields to mark the pay type as tax-exempt. In the example above, the pay type is set up as a standard domestic PDBA that is tax exempt.
In addition to specifying a tax input, you must also enter a value in the Australia Tax Reporting field. Use these values as a guideline when setting up foreign PDBAs:
Input 10 - FX
Input 11 - FA
Input 12 - FE
Input 13 - FM
Input 14 - JX
Input 15 - JA
Input 16 - JE
Input 17 - JM
To specify that a pay type is tax exempt, you enter 1 in multiple fields, as follows:
To specify the pay type is tax exempt, non-foreign pay type, enter 1 in these fields:
PAYG Tax - Input 1
Pre-Tax - Input 6
To specify that a pay type is foreign employment tax exempt, enter a 1 in these fields:
PAYG Tax - Input 10
Pre-Tax - Input 13
Additionally, enter FX in the Australia Tax Reporting field.
To specify that a pay type is JPDA tax exempt, enter a 1 in these fields:
PAYG Tax - Input 14
Pre-Tax - Input 17
Additionally, enter JX in the Australia Tax Reporting field.
To correctly track and report foreign work assignments, the JD Edwards EnterpriseOne Payroll system for Australia enables users to enter foreign employment date records. You use the Foreign Employment Dates program (P75A0150) to enter and maintain this information. These records:
Track the dates during which employees work in foreign assignments that are considered taxable.
Track the type of taxable foreign assignment the employee works. You can specify that the employment is standard foreign employment or JPDA foreign employment.
When you enter foreign employment date records, you specify the following information for each record:
Foreign employment type
Foreign employment types are F (standard foreign employment), and J (JPDA foreign employment).
You cannot enter overlapping date ranges for the same employee and foreign employment type. However, an employee can have an overlapping date range if they have two different foreign employment types. Also, date ranges cannot cross financial years.
For example, employee 6002 might work in multiple job sites during a specified time period. One of those jobs might be a JPDA job site, and the other a standard foreign employment site.
This table illustrates the data you might enter to track these foreign employment assignments:
|Employee Number||Foreign Employment Type||Start Date||End Date|
After you enter records, you can update only the End Date field on the record. All other fields on the record are disabled. If you entered incorrect data initially, you must delete the record and then reenter it. However, be aware that if you have already created payment summaries or the EMPDUPE file for these records, the system will not allow you to delete the record.
Note:You can manually enter individual foreign employment date records using the P75A0150, or you can use standard EnterpriseOne import functionality to import records from a spreadsheet into the F75A0150 table.
For instructions and additional information about the import process, see "Using the JD Edwards EnterpriseOne Web Application User Interface" in the JD Edwards EnterpriseOne Tools Foundation Guide.
Note:If the foreign assignment in which your employees work are exempt, you do not need to enter foreign employment information as described in this section.
After you set up tax information, PDBAs, and enter foreign employment date records, you can then run your employees who work in foreign assignments through the payroll process, using foreign PDBAs to pay them. The final update step of the payroll process creates payroll history for these foreign assignments. This history is used to create foreign and JPDA payment summaries.
This section lists the forms used to enter foreign employment date records, and includes instructions about how to create these records.
|Work With Foreign Employment Dates||W75A0150A||From the Australian Annual PAYG Tax Reporting menu (G07BUSP19), select Foreign Employment Dates.||Use this form to search for and select existing records, and to access forms to add new records.|
|Maintain Foreign Employment Dates||W75A0150B||From the Work With Foreign Employment Dates form, click Add, or select a record and click Select.||Enter new records, or update existing records.|
Access the Work With Foreign Employment Dates form, and then click Add. On the Maintain Foreign Employment Dates form, complete these fields and then click OK:
Enter the address book number of the employee who worked a foreign assignment.
Specify the type of foreign employment that the employee worked. Valid values are stored in UDC table 75/FE, and include:
F: Standard foreign employment.
J: JPDA foreign employment.
Once you create this record, you can not edit this field.
Enter the date on which the employee started employment for this specific assignment. Once you create this record, you can not edit this field.
Enter the date on which the employee's foreign employment assignment ended. You can leave this field blank if the end date is unknown. Be aware that the date range for the record cannot cross multiple financial years. If the assignment crosses financial years, you must enter multiple records. This field is editable after you create the record.
The system automatically populates this field based on the start and end dates of the record, and your fiscal date patterns. This field is not editable.