To record a HECS / HELP debt, follow these steps:
Update the employee
To make sure the employee is identified as having a HECS/HELP debt, update the employee's extended tax details:
- Navigate to the "Employee Details Form"
- Click on the "Tax" tab
- Click the "More" drop down option
- Select "Study and Training"
A list of training and loans schemes appear.
- Select "High Education Scheme Payments" or the Study scheme applicable.
This information is submitted to the ATO as part of the STP payload.
Deducting HECS/HELP from an employee
To collect HECS debt payments, an employer will simply deduct additional PAYG withholding tax from the employee.
The ATO doesn't make a distinction for this type of withholding (the HECS repayment liability component is worked out by the ATO based on the employee's total income). An additional withholding may be added as an additional transaction line in each payment.
See information provided by the ATO:
Adding an account for HECS dedcutions
You do not need to add a separate account for deducting loan account funds as the deductions are added to (and not differentiated) from PAYG withholdings.
The loan deductions are taken into account by the system auto calculating the PAYG based on the relevant tax scales.
So, in summary:
- make sure the "More" employee option is set then
- the system will withhold additional PAYG for this employee
- The STP2 submissions report the employee has study loan deductions
- the ATO will allocated the appropriate proportion of PAYG to the loan repayment