The following document outlines the steps necessary to set up an employee to pay no (0.00%) tax.

Getting There:

[ SC ] –> Payroll / Parameters / Employment Type


Through an arrangement with the ATO, and employee is exempt from paying any tax at all on his / her income. How do we set this up in PowerForce?

When you first see this enquiry, immediately your thoughts might turn to manipulating the tax tables for a value of zero. However, PowerForce has a simpler solution that you are likely to be using already if you employ sub-contractors.

Step 1 - the Employment Type

As you would be aware, the employment type definition is the first launch point in how PowerForce manages employee entitlements and calculations.

To manage the zero tax, create a new employment type called "NOTAX", as per the following image:

no tax

Uncheck the "Tax" checkbox and no tax will be calculated on this employment type's earnings. This is the same setting that you would have on sub-contractor employees.

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Therefore, the steps to create a zero tax rate for an employee are:

  1. Check the current employment type that the employee is under.
  2. Duplicate that employment type definition (calling it NOTAX as an example) and uncheck the "Tax" box.
  3. Change the employee's employment type on their employee record, as per the following:

no tax

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See Also