Payment Summaries 2022

Hello there,

Thanks for posting in the Community! 

When reporting employee earnings to the ATO whether via a payment summary annual report or through STP, certain deductions must be assigned to specific Payment Classifications so they are itemised as per ATO specifications.

There are 2 new payment classification options in the deduction category settings:

• Salary sacrifice (superannuation) - An effective salary sacrifice arrangement, entered into before the work is performed, where contributions are paid to a complying superannuation fund, whereby the sacrificed salary is permanently foregone.
• Salary sacrifice (other employee benefits) - An effective salary sacrifice arrangement, entered into before the work is performed, for benefits other than for superannuation, where the sacrificed salary is permanently foregone, e.g. novated lease, gym membership, workplace giving donations, car, property (goods, land, buildings, shares, and bonds), expense payments (loans, school fees, childcare costs, and home phone costs) and work-related items such as portable electronic devices and equipment.

Here's how to check your current setup:

1. Click on the Employees tab, then select Payroll Settings.
2. Click on Deduction Categories.
3. Select the deduction you created manually, and change the Classification.

Once the above setup has been updated, you can create an updated pay event for ATO.

You can also check this link to learn more about Single Touch Payroll (STP) Phase 2 Hub.

If you've checked the settings in your payroll account and still the issue persists, for us to better assist you I'd recommend contacting our Customer Care Team. That way they can further check your account in a secure form.

Post again in the Community if you have more questions. Have a great day!

Thanks for the prompt reply. I have been in touch with the customer care team for the last few days. They believe when the Gross Wages match the payment summary reportable amount the payment summary is correct. But we need to show only the taxable pay (Gross minus Salary Sacrifice amount) in the employee income summary. Seems to be they do not understand our question.

You have understood the question. Thanks you. 

We have both Salary Sacrifice Super and Salary Sacrifice Other Employee benefits. 

Under the deduction Categories, we have Salary sacrifice (superannuation) We have allocated the Salary Sacrifice Super into this deduction category. 

However, we do not have system-generated Salary sacrifice (other employee benefits).

Instead, we have allocated other employee benefits into pre tax deduction category. 

The payment summary does not exclude the pre-tax deduction component from the Gross wages. Instead Payment summary shows the gross wages as employee taxable income.

Thanks,

Hi there,

Thanks for letting us know about your situation. This might have to do with the pretax deduction set up and the payment classification used when the pay runs were created. You'll have to check the deductions category you've used and make sure it's added as a salary sacrifice pre-tax in the deduction categories. And then, you might have to unlock and finalise the pay run affected making sure it is using the correct payment classification

Since we're in a public space here in the Community we're unable to check the account and the current setup. It's best to reach out back to Live Chat of the Phone support team, that way they can further check and escalate the issue encountered and reach out to one of our payroll specialists to help check your account.

You can also check this link about how to Update deduction categories for STP Phase 2.

Post again in the Community if you have questions about QuickBooks Online!