Tax Information for PDBAs

For the system to identify different types of earnings, and to accurately calculate taxes on those earnings, you must add tax information to PDBAs. Specifically, you must assign each type of earnings an input number and a tax reporting code.

The system uses the input number to identify the type of earnings that the PDBA represents. The tax reporting code identifies the tax rule that the system uses to calculate the tax amount that is associated with the PDBA. The tax reporting code is also used for tax reporting. Specific types of earnings must be reported in specified places on the Payment Summary forms. To identify which types of earnings should appear in each section of the Payment Summary form, you must add tax-reporting codes to all PDBAs that the organization reports to the governing organization.

Note: When processing information about payment summaries, the system does not include any PDBAs that do not include a Payment Summary reporting code. Valid tax reporting codes are stored in UDC 06/S2.

The system uses the input numbers and tax reporting codes that are associated with the PDBAs, tax rules, and tax area information to accurately calculate tax amounts. For example, each PDBA that you use to distribute regular earnings should be set up with an input number 1 and a tax reporting code of TX. In addition, you must ensure that tax area information and corporate tax IDs have been set up for Federal A. This table provides several examples of how you might set up the system for specific types of earnings:

Type of Earnings or Payments (PDBAs)	Mark the Input number for all PDBAs associated with the type of earnings	Set up a tax reporting code and a tax rule for the tax reporting code	Set up tax area information and corporate tax IDs for these tax types
PAYG regular earnings.	1	TX	Federal A.
Lump Sum A payments.	2	LSA	LA (for each Australian state in which the organization does business).
Lump Sum B payments.	3	LSB	LB (for each Australian state in which the organization does business).
Lump Sum C payments for employees who are older than 55.	4	LSO	LC (for each Australian state in which the organization does business).
Lump Sum E payments.	5	LSE	LE (for each Australian state in which the organization does business).
Pretax deductions, or excludable earnings.	6	GRN	No additional tax type setup is required.
Leave loading payments.	7	LL	No additional tax type setup is required.
Lump Sum C payments for employees who are 55 and younger.	8	LSC	LC (for each Australian state in which the organization does business).

Note: Because tax regulations periodically change, contact the local account representative for specific values and setup information that is necessary to ensure that the tax rules are set up correctly.