This article is for Australian payroll users only
The link to ATO's rules around this is here:
Simply enter the amount as an allowance using the appropriately classified code (the Category used by the allowance is critical to getting the correct calculation: e.g. Bonus, Backpay or Commission (and there's two Backpay options))
The way it works is:
- take the employee's current pay (or ordinary pay if no current pay entries), ignoring the BBC, calculate the tax
- do the same calculation including the BBC, calculate the tax
- the difference is the amount of tax to be deducted for the BBC (limited to 47%)
- you can view the calculation details in Payrun..Summary, by hovering your mouse over the word "Tax"
You can also override the automatic tax calculation with your own (Payrun..Summary..Override tax).