Overview
This article will explain how to record PAYG Instalments and what impact it will have on the Company Franking Worksheet.
For PAYG Instalments to be correctly reflected within the Company Franking Worksheet, each PAYG instalment must be separated in its own transaction.
Recording in Current Year
To record a PAYG instalment for the current financial year, follow these steps:
- Create a journal transaction.
- Post to the following accounts.
| Account Name | Debit | Credit |
|---|---|---|
| 85000 (Income Tax Payable / Refundable) | XXX |
|
| 60400 (Bank Account) |
| XXX |
3. In the More Details of 85000 (Income Tax Payable / Refundable), you must choose the current financial year.
This will create the following journal on the Franking Worksheet in the Current Financial Year.
To record a Payment of Tax Journal for the current financial year, follow these steps:
- Create a journal transaction.
- Post one of the following transactions
| Account Name | Debit | Credit |
|---|---|---|
| 85000 (Income Tax Payable / Refundable) | XXX |
|
| 86000 (PAYG Payable) |
| XXX |
| Account Name | Debit | Credit |
|---|---|---|
| 85000 (Income Tax Payable / Refundable) | XXX |
|
| 88000 (Sundry Creditors) |
| XXX |
3. In the More Details of 85000 (Income Tax Payable / Refundable), you must choose the current Financial Year.
This will create the following journal on the Franking Worksheet in the Current Financial Year.
To record a Receipt of Income Tax for the current financial year, follow these steps:
- Create a journal transaction.
- Post one of the following transactions
| Account Name | Debit | Credit |
|---|---|---|
| 60400 (Bank Account) | XXX |
|
| 85000 (Income Tax Payable / Refundable) |
| XXX |
| Account Name | Debit | Credit |
|---|---|---|
| 88000 (Sundry Creditors) | XXX |
|
| 85000 (Income Tax Payable / Refundable) |
| XXX |
3. In the More Details of 85000 (Income Tax Payable / Refundable), you must choose the prior Financial Year.
This will create the following journal on the Franking Worksheet in the Current Financial Year.
How to Record in the Next Financial Year
To record a Payment of PAYG Instalment in the next financial year, please follow these steps:
- Create a journal transaction.
- Post one of the following transactions.
| Account Name | Debit | Credit |
|---|---|---|
| 85000 (Income Tax Payable / Refundable) | XXX |
|
| 86000 (PAYG Payable) |
| XXX |
| Account Name | Debit | Credit |
|---|---|---|
| 85000 (Income Tax Payable / Refundable) | XXX |
|
| 88000 (Sundry Creditors) |
| XXX |
3. In the More Details of 85000 (Income Tax Payable / Refundable), you must choose the current Financial Year.
This will create the following amount on the Franking Worksheet in the Current Financial Year.
Why isn’t my PAYG instalment appearing in the Franking Credit Worksheet?
If you have posted to 85000 (Income Tax Payable / Refundable), 88000 (Sundry Creditors) and the 60400 (Bank Account) within the same transaction, as shown below, the amount will not be reflected correctly in the Franking Credit Worksheet.
| Account Name | Debit | Credit |
|---|---|---|
| 85000 (Income Tax Payable / Refundable) | XXX |
|
| 88000 (Sundry Creditors) |
| XXX |
| 60400 (Bank Account) | XXX |
When recorded this way, the Franking Credit Worksheet cannot recognise the PAYG instalment correctly.
Solution
To resolve this issue, the journal must be split into two separate transactions.
Transaction 1: Recording the current PAYG payment in the current year
First, post the following transaction.
| Account Name | Debit | Credit |
|---|---|---|
| 85000 (Income Tax Payable / Refundable) | XXX |
|
| 88000 (Sundry Creditors) |
| XXX |
In 85000 (Income Tax Payable / Refundable), open More Details and ensure the Financial Year is set to the current financial year.
This will create a journal entry in the Franking Credit Worksheet for the current financial year. The description will appear as Payment of PAYG Instalment.
Transaction 2: Recording the PAYG Sundry Amounts
Post the following transaction.
| Account Name | Debit | Credit |
|---|---|---|
| 85000 (Income Tax Payable / Refundable) | XXX |
|
| 60400 (Bank Account) |
| XXX |
Again, in 85000 (Income Tax Payable / Refundable), open More Details and ensure the Financial Year is set correctly.
This will create the corresponding journal entry in the Franking Credit Worksheet in the following financial year. The description will also appear as Payment of PAYG Instalment.