BAS W2 figure warning

When calculating my BAS, why am I getting the following (similar) warning message?

The Pay As You Go (PAYG) withholding system is used to incrementally put aside portions of each employee's salary (i.e. withhold it), every pay day throughout the financial year to cover the employee's expected tax bill (liability) at year's end.

The W2 figure is the total amount of PAYG tax withheld from the total of salary, wages and other payments made to all employees, for a specific BAS period.

When the W2 figure calulated from the payroll does not equal the amount in the PAYGW account (which accrues each time a cashbook transaction is created for a matching pay), this indicates that:
(a) a pay/s has been entered into the payroll but not into your cashbook (or vice versa), OR
(b) there is at least one pay with a Date Paid in the payroll  that is different to transaction date in the cashbook, OR
(c) the wages account used has not been ticked as a Wages Account in the Chart of Accounts setup.

(d) OR the employees tax scale is set to 75 or above. Employees on a tax scale of 75 or above will not be elgible for a payments summary, which can cause this error.
A new flat rate tax scale will need to be set and assigned to the employee, with a number of 74 or below. See Setting Up A New Flat Rate Scale.

To check (a) and (b):

OPTION 1

• Click on the Check Wages button on the BAS window. This will detail cashbook transactions without a matching payroll record, and vice versa.

OPTION 2  if option 1 does not give you enough detail.

Step 1

• Click on the Review tool bar icon.

Step 2 

• Enter the Account Code: PAYGW. (or choose the appropriate description if selecting by description. eg. PAYG Withholding Tax).

Step 3

• Enter the Date Range. (ie. the date range for the BAS period that you are calculating.)
• This shows the PAYG Withholding Tax that has been entered into Cashbook.
• Click on the Print button. (Printing this report will make it easier to compare entries in Cashbook and entries and Payroll.)

Step 4 

• Click on the Payroll > Reports menu option.
• Select Pays History.
• Select Report Type: Detailed by employee.
• Enter Period From and To . (ie. the date range for the BAS that you are calculating.)
• Use Date is Date paid.
• Click on the Print button.
• Print this report.

Step 5

• Change Use Date to Pay period end date.
• Click on the Print button. Print this report, as well.

Step 6 

• Now that you have 3 different reports that show the information in PAYGW you can compare the figures.
• Look for a pay that has been entered into payroll but not into cashbook.
• Alternatively, there may be a pay with a different date paid to pay period end date. The BAS is calculated on date paid rather than the pay period end date so there can be a pay in cashbook (with the accompanying tax), that isn’t included in the payroll tax amount.

Step 7

• If you find a pay that has the wrong dates or a pay that has been entered into payroll and not into cashbook or a pay that has been entered into payroll twice then you can correct the error.

To check (c):

Step 8

• Click on Chart on the tool bar.
• Type in the account code/description for your wages accoount into the Search For Code box.

• Click on the Edit button.
• Tick the Wages Account box.