How do I change the Residency for Taxation Purposes for a Payee?

How to change the Residency for Taxation Purposes for a Payee.

Select Payees from the side navigation menu.

Locate the Payee you require by manually scrolling through the Payee List, entering the name into Search or using Show Advanced Filters.

Once the Payee has been located, select Actions > Edit.

🎯 Edit is unavailable if the Payee is included in an unposted Pay Run. To edit the Payee, the Payee must either be removed from the Pay Run or the Pay Run must be posted/reported to the ATO.

Change the Residency for Taxation Purposes as required.

The Invalid Tax File Number for Residency Status Error Message is displayed when adding or editing a Payee when Residency for Taxation Purposes is changed to either Foreign Resident OR Working Holiday Maker and the Payee's Tax File Number is either Exemption TFN 333-333-333 or 444-444-444.

As these Tax File Numbers are not valid for either Tax Treatment, once Acknowledge is chosen, enter a VALID Tax File Number to change the Residency for Taxation Purposes.

Select Acknowledge within the Residency for Taxation Purposes Updated Information Message.

Next, select Taxation and Medicare.

Confirm the Tax Treatment, based on the Residency for Taxation Purposes and the Tax File Number.

Confirm the Income Stream.

Deselect Tax Free Threshold if required per the Tax File Number Declaration (NAT 3092) or Withholding Declaration (NAT 3093).

The Tax Free Threshold is DISABLED and unable to be deselected if the Tax File Number is 333-333-333 or 444-444-444.

Select Student and Training Support Loans (STSL) if required per the Tax File Number Declaration (NAT 3092) or Withholding Declaration (NAT 3093).

Student and Training Support Loans (STSL) is DISABLED and cannot be selected if the Payees Tax File Number is 333-333-333.

If Tax Treatment is set to Seniors and Pensioners, select the relevant Senior Australians and Pensioners Tax Offset (SAPTO) per Question 8 in Withholding Declaration (NAT 3093) or Question 6 in Withholding declaration – short version for Seniors and Pensioners (NAT 5072).

Next, navigate to Medicare If the Tax Treatment is Regular or Seniors and Pensioners

If the Payee answered Yes to Question 4. Select Increase the amounts withheld to cover the Medicare Levy Surcharge (MLS), then the relevant percentage.

If the Payee answered Yes to

Questions 5 and 6, select Medicare Levy Exemption (MLE), then Half.
Questions 5, 6, 8, 9 and/or 12, select: Medicare Levy Exemption (MLE) then Half.
Questions 5 and 7, select Medicare Levy Exemption (MLE), then Full.

If the Payee answered Yes to

Question 8, Question 9 and/or 12, select Medicare Levy Reduction (MLR), then Spouse and/or Dependent Children.
Questions 5, 6, 8, 9 and/or 12, select: Medicare Levy Reduction (MLR) then Spouse and/or Dependent Children.

Select Save to save your changes.

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