Introduction
About this guide
The Affinity system calculates the tax amount for each employee's pay. Each year, the Australian Tax Office (ATO) and Inland Revenue New Zealand (IRD) introduce changes to tax tables (and therefore tax rates) which we need to implement into the system.
This guide tells you how to test each change across a variety of scenarios to ensure that employees continue to be taxed correctly once the updates are in the system.
Why we test
We need to ensure that the system continues to correctly calculate employee tax withholdings — but at the new rates.
Testing consists of comparing the results of your own manual calculations against the results of a special testing app. You will use spreadsheets to do your manual calculations, and the app does its own calculations based on updates made to it by one of our developers.
The goal is to have zero variance between your calculations and the app's calculations so the new rates can be rolled out to all companies.
Basic approach
We use a staged approach when rolling out annual tax updates to clients:
Receive notification of changes from the ATO or IRD.
To schedule and track tasks, create a HIVE project (copy projects from previous years if that's easier).
Arrange for the testing app to be updated by the developer.
Conduct the required testing and report any issues to the developer. Re-test as needed.
Arrange for company 1153 to receive a test instance of all updates.
Conduct further testing then roll out to all production companies.
Which country are you testing?