PAYG Clearing

Can you show screenshot of your Payslip items under Settings tab? It looks like your payg liability account is not linked with payroll.

This is not a payment from staff wages. That all working fine, including the Super Contributions! I have no problem with that side.
The payment is for myself as the Small Business owner, every quarter I must pay whatever % is deem by the ATO for the current financial year. This year is 16.5% of the income for each quarter. or the option of paying a set amount that has been worked out by the ATO per quarter (based on the income of the previous year).

The way it worked in MYOB, was to journal a debit (worked out for the quarter owing) to the liability account & then make a payment from the cheque account to zero out the liability.

I see. Then you can make a journal entry but you need to debit some account too so journal entry is balanced. This would be the same under MYOB (or any accounting system).

So when making a journal entry, credit PAYG liability as you did and debit Owner's equity by the same amount assuming you are a sole trader.


OK the concept is kind of similar to MYOB, however when I journal a Credit to PAYG & debit Owners Equity.
The fees is zeroed out of Liabilities (as expected), but now the figure appears in the Suspense Account & not in Owners Equity.

Can you show again how did you enter that journal entry (with Owner's equity account) ?

Journal entry attached.

You have not selected the necessary subaccount under owner’s equity. I don’t know how your chart of accounts is set up, but you must first create those subaccounts if you have not. Then you must choose one. If you do not, Manager does not know whose account to allocate the transaction to. Rather than lose it, Manager places it into Suspense.

Thanks for that, I have created an Equity Account for Owners PAYG Payments that has fixed the issue.
I had previously used MYOB for around 10 years, having originally starting with a set of books that matched my business.
Using the generic template, all of the accounts etc. were preset & everything just when were it should straight out of the box. I recently upgrade my computer & my old MYOB would not load due to the new operating system.
I was about to upgrade my MYOB when a friend put me onto Manager. Pretty happy with the decision to use the software. Once you get your head around the setup it great, not to mention the great forum support. Way better then the support I received from MYOB.

Also, do you know if their is a way to get a bank account reconciliation report out of Manager, similar to MYOB?

Reconciliation process is explained in the Guides at Manager Cloud. Other users have asked about a reconciliation report, even mentioning MYOB. I am not personally familiar with that program, but the report as described by others seemed fairly useless to me. I view reconciliation as a double-check to confirm accuracy of records. Once the records are known to be accurate, with any necessary corrections, I see no purpose in a report that summarizes the accuracy of the records.

Anyway, there is no such report in Manager. But you can view and export account registers and create any data presentation you want.

Many such requests seem like throwbacks to old, manual accounting practices, where our arithmetic was suspect. One of Manager’s benefits is the convenient drill-down feature on almost every balance anywhere in the application, so we can quickly track down inconsistencies.

I think bank reconciliation report is still useful. It explains difference between balance as per balance sheet and balance as per bank statement.

I’m planning to add this report in January.

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That would be great if you could do that, as it is required for our Accountant. It is available in all other commonly used accounting packages down here in OZ, like MYOB & Quick Books. I am pretty sure this feature was available 20 years ago when I used invoices in Word document format & Microsoft Money for my business accounting.

I just started using Manager and I’m stuck at understanding how to import PAYG into the software.
I have read through this specific page few times but still not sure how I am supposed to set it up.

As nbd mentioned: This PAYG is for myself as the Small Business owner, every quarter I must pay whatever % is deem by the ATO for the current financial year. This year is 16.5% of the income for each quarter. or the option of paying a set amount that has been worked out by the ATO per quarter (based on the income of the previous year. As in it has nothing to do with Payrolls/Payslips.

Anyone who can explain and guide me would be appreciated :slight_smile:

You would be better posting this in a new topic instead of add it to a 5 year old topic, even if it is somewhat similar

I do not know anything about Australian payroll taxes so I can’t answer your question, sorry

Read and follow this Guide first: Add localized settings and features | Manager.

If you are a sole trader, and referring to PAYG businesses income tax, then it is paid each quarter when doing your BAS. Funds for which are typically taken out of owners equity. It is possible to record the businesses PAYG tax paid in an asset account (reflecting what the ATO) does and use that together with any adjustment to pay your annual income tax. However I suspect most users don’t bother (with this approach a income tax liability account is also appropriate, recording future income tax payable based on regular businesses income, the ATO tax calculator & paid out of owners equity).

On the other hand the STP localisation is used if your businesses has employees, such as other staff or your businesses is a company which employees you. Again the ATO tax calculator can be used to calculate PAYG tax, which is then entered as a payslip item.

Hi Tut,
I have read and done what the link says before but I am still not sure how to set up my PAYG

Hi Patch,
Thank you for explaining but I am still not sure/clear as to how to set up my PAYG.

If I add “income tax liability” in my Liabilities and enter an amount in there, it comes with a message saying its unbalanced.
When I add “Owners equity” in my Equity list and enter the same amount as the one entered in income tax liability, it becomes balanced but doesn’t show/affects my Net profit. Which I assume its not correct?
I am not sure if I am not setting up properly or I am not entering things how I should.
I tried entering the amounts as ‘New Payments’ & as a ‘Journal Entry’ but both results seem wrong.

I suggest you just pay your sole trader PAYG tax out of owners equity. Your profit and loss in Manager will show your profit / loss before tax.

It is possible to show profit after tax in Manager but I don’t think you will find it worth the effort. To do so you need to use the same structure as is used if you managed your businesses through a company:

  • profit / loss expense account for “income tax”
  • Balance sheet liability account for “Income tax liability”
  • Balance sheet asset account for “Businesses PAYG paid”
  • at least each quarter calculate your businesses before tax profit. Use the ATO tax calculator to estimate income tax liability. Use a journal entry to transfer this amount from the income tax expense account to the income tax liability account.
  • when paying your BAS your PAYG is added to your “Businesses PAYG paid” asset account.
  • when you pay your annual income tax use the actual figures to achieve the correct starting balance of the above 3 accounts for the next financial year.

For further discussion see What account does corporation tax go under?

So in summary it is possible to show “income tax expense”, “income tax liability”, and “PAYG asset”. But it is easier not show any of this and to just pay sole trader PAYG tax out of owners equity. Using the latter approach you need to put aside savings to pay your income tax if your businesses grows rapidly (when PAYG is inaccurate).

Thank you for that Patch