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  • Assign ATO reporting categories for Single Touch Payroll reporting


 

 

The functions described on this page are available in AccountRight 2018.3. Get the latest version

Before you can report payroll and super information to the ATO, you need to assign an ATO reporting category to all the payroll categories you've used in the current payroll year.

This includes wages, allowances, deductions and superannuation categories. The ATO category indicates the type of payment you're reporting (is it a gross wage amount or an allowance?)

While it's similar to how categories were assigned to payment summary fields, there are important differences. For example, some ATO reporting categories have been renamed and you now need to report superannuation amounts.

Below is a summary of the new ATO reporting categories.

Which ATO reporting category should I assign? We'd love nothing more than to answer this question for you. But every business, award and employee agreement is unique, and so are the names you give to your categories.

We've provided general information below to guide you on what to assign. If you're still not sure of what's appropriate for your business, talk to your accounting advisor or the ATO. You can also refer to the ATO website for more information.

To assign ATO reporting categories
  1. Go to the  Payroll command centre and select Payroll Categories. A list of your Wages categories appears.

    payroll category ATO reporting category to be assigned

  2. Click a category to open it. The ATO Reporting Category column shows the category assigned.
  3. Select the appropriate category from the ATO Reporting Category list.
  4. Click OK.
  5. Repeat for all wage payroll categories (see Wages info below for more info).
  6. Select the Superannuation tab and repeat the steps to assign categories (see Superannuation info below for more info).
  7. Repeat for all categories in the Deductions and Tax tabs (see below for more info).

Learn about the ATO reporting category types

Wages
New ATO reporting categoryMore informationATO links
Gross Payments

Include all payroll categories you use for paying salary and wages. This includes categories for:

  • holiday pay
  • sick pay
  • overtime
  • bonuses
  • commissions.

There are more categories and some exceptions to these.  

Do not include salary sacrifice payroll categories. Gross payments are reduced automatically when you assign pre-tax deductions and pre-tax superannuation categories such as salary sacrifice.

Gross payments

Allowance - Car
Allowance - Transport
Allowance - Travel
Allowance - Meals
Allowance - Laundry
Allowance - Other

This includes payments you made to cover your employees’ work-related expenses, like tools or phone. For allowances that don’t sit into any of the main categories, assign them to Allowances – Other.

Typically, you wouldn't include amounts you paid for living-away-from-home allowance because these amounts are not assessable income (but check this with the ATO).

Withholding for allowances  

The rules of reporting through Single Touch Payroll - Allowances

Lump Sum A - Termination
Lump Sum A - Redundancy
Lump Sum B
Lump Sum D
Lump Sum E

Lump sum payments may include payroll categories such as:

  • redundancies
  • payments in lieu of notice
  • payments of annual leave on termination.

Lump sum payments are a complex area. Chat to your advisor or check with the ATO for more guidance.

Taxation of termination payments

CDEP Payments

Assign payroll categories for:

  • Community Development Employment Project (CDEP) scheme wages
  • CDEP scheme participant supplement from a Centrelink payment.
CDEP payments
Exempt Foreign Income

This could be assigned to payroll categories such as salary, wages, commissions, bonuses and allowances that are exempt from Australian tax.

Exempt foreign employment income

ETP - Taxable component
ETP - Tax free component

  
Superannuation

The ATO Reporting Category is automatically assigned (and can't be changed) for superannuation categories set up with the following Contribution Types :

  • Superannuation Guarantee (expense)
  • Employee Additional (deduction)
  • Redundancy (expense)
  • Spouse (deduction)

For superannuation categories that handle reportable superannuation payments (as classified by the ATO reporting guidelines), you need to assign the Reportable Employer Super Contributions (RESC) category. This can include salary sacrifice categories.

SGC category with locked ATO reporting category highlighted

New ATO reporting categoryOld Payment Summary field nameMore information

Superannuation Guarantee

New

This is the first time employers have been required to report this information to the ATO. It's requried to check that employee super funds are receiving the correct amounts.

Reportable Employer Super Contributions (RESC)Step 5 in the Payment summary assistant

Use this to assign superannuation categories which handle 'reportable' superannuation payments (as classified by the ATO guidelines). This can include salary sacrifice categories.

Note that this option only appears for Employer Additional (expense), and Salary Sacrifice (deduction) contribution types.

Did you previously report salary sacrifice amounts on payment summaries? You don't need to assign the Gross wages category to salary sacrifice amounts. When reporting payroll amounts using Single Touch Payroll, gross wage amounts are reduced automatically by deduction amounts that are marked as a before-tax deductions. This includes salary sacrifice superannuation deductions.

Note that you assign the Reportable Employer Super Contributions (RESC) category to superannuation categories which handle 'reportable' superannuation payments (as classified by the ATO guidelines).

Deductions
New ATO reporting categoryDescriptionATO reference

Deduction - Work Place Giving

Assign payroll categories that are donations made under a workplace giving arrangement.Workplace giving programs

Deduction - Union/Professional Assoc Fees

This might include payroll categories for:

  • union fees
  • memberships to professional associations.
Union fees, subscriptions to associations and bargaining agents fees
ETP - Tax WitholdingUse this reporting category when an ETP has been made to an employee. 
Not Reportable

All other deductions are usually considered not reportable. This includes payroll categories like:

  • salary sacrifice that is exempt from fringe benefits tax
  • child support
  • loan or car payments

This is because they may not need to be itemised on an employee's tax return.

 
Taxes

The ATO Reporting Category is automatically assigned (and can't be changed) for the PAYG Withholding payroll category.

Payroll Category Liust window showing ATO reporting category set to PAYG withholding

New ATO reporting categoryOld Payment Summary field nameMore information

PAYG Withholding

Total Tax Withheld

This is automatically assigned and can't be changed.

  ATO reporting category FAQs


Which payroll categories are not reportable?

Which payroll categories are not reportable?

In most cases, payroll categories that don't need to be included on an employee's tax return, are not reportable. Depending on your circumstances. this may include payroll categories for post-tax deductions and deductions that are exempt from fringe benefits tax. For example:

  • salary sacrifice that is exempt from fringe benefits tax
  • child support
  • loan or car payments

If you're not sure what reporting category to assign, talk to your accounting advisor or the ATO.

How do I assign salary sacrifice superannuation?

How do I assign salary sacrifice superannuation?

When reporting payroll amounts using Single Touch Payroll, gross wage amounts are reduced automatically by deduction amounts that are marked as a before-tax deductions. This includes salary sacrifice superannuation deductions. It doesn’t matter which ATO category a deduction is assigned to (including the Not reportable category).

Previously, to reduce taxable gross amount on payment summaries, you needed to assign the relevant payroll category (for example, salary sacrifice) to gross payments. You don't need to do this for single touch payroll reporting.

Note that you need to assign the Reportable Employer Super Contributions (RESC) category to superannuation categories which handle 'reportable' superannuation payments (as classified by the ATO guidelines).

What category should I assign to infrequently used payroll categories?

What category should I assign to infrequently used payroll categories?

Only if a payroll category has been used in the current payroll year and it needs to be reported to the ATO do you need to assign a category.

If you're not sure what reporting category to assign, talk to your accounting advisor or the ATO. You can also refer to the ATO website for more information. Note that although the ATO's info on this page applies to payment summaries, it's follows the same rules for ATO reporting categories. We'll update this link when more information becomes available.

Can I delete an unused payroll category?

Can I delete an unused payroll category?

Yes - but only if the payroll category:

  • has never been used on a pay
  • is not part of an employee’s standard pay
  • is not linked to another payroll category (such as a wage category linked to an entitlement category), or
  • is not the Base Hourly or Base Salary payroll category (which can't be deleted).

To delete a payroll category:

  1. Go to the Payroll command centre and click Payroll Categories.
  2. Open the payroll category you want to delete.
  3. Go to the Edit menu and choose Delete Category.

Why am I getting the error "WagesPayrollCategory_ExemptionsNotDeduction" when assigning an ATO reporting category?

Why am I getting the error "WagesPayrollCategory_ExemptionsNotDeduction" when assigning an ATO Reporting Category?

This error can in recently upgraded company files, and our experts are working on a permanent solution. Until then, here's a workaround that'll fix the issue:

  1. Click Exempt (at the top of the wage category).
  2. Take note of which categories are selected.
  3. Deselect all categories. If none are selected, select all.
  4. Click OK, then click OK again to save the changes.
  5. Open the wage category again and select the applicable ATO Reporting Category.
  6. Click Exempt and select the categoriues noted at step 2 (if none were selected, deselect all).
  7. Click OK then click OK again to save your changes.