What is Medicare levy in SAP PY-AU - Australia?

SAP Term: Medicare levy

• Component: PY-AU

• Component Name: Australia

• Description: n tax scales incorporate a Medicare levy for medical costs that are paid by the government. Some employees are eligible for Medicare levy adjustments. This means that they are reimbursed part of the Medicare levy that is incorporated in the tax scales. Only employees with tax scales 2, 6 or 7 are eligible for a Medicare levy adjustment.

Smart SAP Assistant

• Key Concepts: 
  Medicare Levy is a tax imposed by the Australian Government on all taxpayers to help fund the country’s public health system. It is calculated as a percentage of taxable income and is collected by the Australian Taxation Office (ATO). The current rate of Medicare Levy is 2%. 
  
  How to use it: 
  In SAP, the Medicare Levy is calculated in the payroll component PY-AU Australia. This component is used to calculate the employee’s taxable income and then the Medicare Levy is applied to that amount. The amount of Medicare Levy due is then deducted from the employee’s net pay. 
  
  Tips & Tricks: 
  It is important to ensure that the correct rate of Medicare Levy is applied when calculating payroll in SAP. The rate may change from time to time, so it is important to keep up to date with any changes. 
  
  Related Information: 
  For more information on the Medicare Levy, please refer to the Australian Taxation Office website: https://www.ato.gov.au/Individuals/Medicare-levy/.