While setting up Single Touch Payroll (STP), specific types of allowances need to be separately itemised on the Income Statement, similar to what currently occurs with payment summaries. The difference with STP however, is that the separately itemised allowances need to be grouped and reported by categories.
How to edit Allowances
To edit an allowance follow these steps:
- Select Payroll from the left-hand menu
- Select the Payroll Settings tab, then select Pay Categories (Located under Pay Run Settings).
- Select the pay category you wish to edit
- Choose an option from the dropdown for Payment Summary Classification, then select Save
How to classify allowances for STP
Using the ATO guidance, each allowance category relates to one of the six Withholding for allowances tables that can be accessed from the ATO website here.
If you are unsure of what your allowances should be classified as, please consult with the ATO or your bookkeeper or accountant.
Below are examples for each allowance:
| Table | Payment Summary Classification | Additional Notes: |
| Table 1 | Default or Allowance (Other) | All Allowance types in table 1 should be classified as Default with the exception of Deductible expenses which should be classified as Allowance (Other). Examples of 'working conditions, qualifications or special duties' include:
Examples of 'non-deductible expenses' include:
Examples of 'deductible expenses' include:
|
| Table 2 | Allowance (Car) | |
| Table 3 | Allowance (Transport) | |
| Table 4 | Allowance (Laundry) | |
| Table 5 | Allowance (Meals) | |
| Table 6 | Allowance (Transport) | Examples here include domestic or overseas travel allowance above the reasonable limit and all overseas accommodation allowances. |
Content sourced from Employment Hero