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What is each ATO reporting category for?
Use this information to work out which reporting categories you need to assign to your payroll categories. The STP Phase 2 reporting categories can be assigned now but they won't apply until STP Phase 2 begins.
| ATO reporting category (Phase 1) | ATO reporting category (Phase 2) | More information | ATO links |
|---|---|---|---|
| Gross Payments | Gross payments | Include payroll categories you use for paying salary and wages. For STP Phase 1, this includes categories for:
For STP Phase 2, payments that don’t sit into any of the main categories, assign them to Gross payments (but check this with the ATO). | The rules of reporting through Single Touch Payroll |
Allowance - Car | Allowance - cents per km | This includes payments you make to cover your employees’ work-related expenses. For allowances that don’t sit into any of the main categories, assign them to Allowance – Other (but check this with the ATO). Typically, you wouldn't include amounts you pay for living-away-from-home allowance because these amounts are not assessable income (but check this with the ATO). | |
Lump Sum A - Termination | Lump Sum A - Termination | Lump sum payments may include payroll categories such as:
For STP Phase 2: Lump Sum W — this has been added which is for return to work payments. Lump Sum E — you'll only be able to set this up after your business moves to STP Phase 2. The way these lump sum payments work is changing for STP Phase 2 Learn more on the ATO website Lump sum payments are a complex area. Chat to your advisor or check with the ATO for more guidance. | |
CDEP Payments | CDEP Payments | Assign payroll categories for:
| CDEP payments |
| Exempt Foreign Income | 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 | ETP - Taxable component ETP - Tax free component | These are payroll categories used to track the taxable and tax-free components of employment termination payments. ETPs are concessionally taxed up to a certain limit, or 'cap'. Certain types of termination payments are tax free up to a certain limit, for example, if the ETP is because of redundancy or early retirement. | Taxation of termination payments |
The ATO Reporting Category is automatically assigned for superannuation categories set up with the following Contribution Types :
- Superannuation Guarantee (expense)
- Employee Additional (deduction)
- Redundancy (expense)
- Spouse (deduction)
| ATO reporting category (Phase 1) | ATO reporting category (Phase 2) | More information |
|---|---|---|
Superannuation Guarantee | Superannuation Guarantee | This information is reported to the ATO to check that employee super funds are receiving the correct amounts. |
| Reportable Employer Super Contributions | Reportable Employer Super Contributions | Use this to assign superannuation categories which handle 'reportable' superannuation payments (as classified by the ATO guidelines). Note that this option only appears for Employer Additional (expense), and Salary Sacrifice (deduction) contribution types. |
Salary Sacrifice | Use this to assign salary sacrifice super categories. |
| ATO reporting category (Phase 1) | ATO reporting category (Phase 2) | Description | ATO reference |
|---|---|---|---|
Deduction - Work Place Giving | Deduction - Work Place Giving | Assign payroll categories that are donations made under a workplace giving arrangement. | Workplace giving programs |
Deduction - Union/Professional Assoc Fees | Deduction - Union/Professional Assoc Fees | This might include payroll categories for:
| Union fees, subscriptions to associations and bargaining agents fees |
| ETP - Tax Withholding | ETP - Tax Withholding | Use this reporting category when an ETP has been made to an employee. | Taxation of termination payments |
Salary sacrifice - other employee benefits | For deductions that are for benefits from an effective salary sacrifice arrangement, including those exempt from FBT. | Salary sacrifice arrangements | |
| Not Reportable | All other deductions are usually considered not reportable. This includes payroll categories like loan or car payments. This is because they may not need to be itemised on an employee's tax return. If you're not sure if a deduction is reportable, check with your accounting advisor or the ATO. |
The ATO Reporting Category for the PAYG Withholding payroll category can only be set to PAYG Withholding.
| ATO reporting category | ATO reporting category (Phase 2) | More information |
|---|---|---|
PAYG Withholding | PAYG Withholding | This is automatically assigned and can't be changed. |
This category reports all tax withheld from the employee, including any extra PAYG that may be deducted.
Assigning ATO reporting categories
You need to assign ATO reporting categories to all wage, deduction and superannuation payroll categories you've used in the current payroll year, and whenever you create new ones.
If you're setting up STP for the first time, your AccountRight company file is checked to find any payroll categories that don't have an ATO reporting category assigned—so you can then assign one.
If you'd like to start assigning ATO reporting categories in preparation for STP Phase 2, you (or your bookkeeper) can do so within each payroll category.
Go to the Payroll command centre and click Payroll Reporting. Employees paid in the current payroll year (including terminated employees) are included in the payroll check. You'll see a list of payroll categories you need to fix before you can connect to the ATO and start reporting using Single Touch Payroll.
- Click the arrow next to a payroll category in the errors list. The payroll category Information window appears.
- Choose the appropriate category from the ATO Reporting Category list. See above for information to help you select it, or speak to your accounting advisor or the ATO.
- Click OK.
- Repeat for all other payroll categories listed in the Check Payroll Details window.
- Click Check Payroll Details to refresh the list.
The current (Phase 1) ATO reporting categories will apply until STP Phase 2 starts. But if you'd like to get a head start, you can assign the updated ATO reporting categories now.
If you need help choosing, check the info above or speak to your accounting advisor or the ATO.
- Go to the Payroll command centre and choose Payroll Categories.
- Click the Wages, Superannuation or Deductions tab.
- Choose the applicable ATO Reporting Category (Phase 2).
- Click OK.
- Repeat for each of your wage, super and deduction payroll categories.
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