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STP Phase 2 - Disaggregation of Gross

Refer to Single Touch Payroll Phase 2 employer reporting guidelines | Australian Taxation Office (ato.gov.au) as a guideline in order to be able to set up your Payroll Items correctly.

ATO Requirements

One of the main requirements of STP Phase 2 is the Disaggregation of Gross, where the ATO requires a business to differentiate between different payroll item types and classify them accordingly. Instead of reporting a single gross amount, you will now be required to separately report the following:

  1. Gross
  2. Overtime
  3. Bonuses and Commissions
  4. Directors' fees
  5. Paid leave
  6. Allowances
  7. Lump Sum W
  8. Salary Sacrifices

Please see Permissible Income Tax Tracking Types per Income Type for more information.


Reckon Accounts implementation

New Tax tracking type

Payroll Items are reported in STP with the use of the Tax Tracking Type to group them accordingly. To accommodate the STP Phase 2 changes, the Tax Tracking Types were updated:

GROSS EARNINGS

PAID LEAVE

ALLOWANCES

LUMP SUM

SALARY SACRIFICE

  1. Overtime
  2. Bonus and Commissions
  3. Directors' Fees
  1. Leave – Cash out of leave (C)
  2. Leave – Unused Leave on Termination (U)
  3. Leave – Paid Parental (P)
  4. Leave - Workers Compensation (W)
  5. Leave – Ancillary and Defence Leave (A)
  6. Leave – Other Paid Leave (O)
  1. Allowance – Cents per Kilometre
  2. Allowance – Award Transport Payments
  3. Allowance – Laundry
  4. Allowance – Overtime Meal Allowances
  5. Allowance – Domestic or Overseas Travel and Accommodation
  6. Allowance – Tool Allowances
  7. Allowance – Tasks
  8. Allowance – Qualifications/Certificates
  9. Allowance – Other
    1. Allowance – Other (Non Deductible)
    2. Allowance – Other (Uniform)
    3. Allowance – Other (Private Vehicle)
    4. Allowance – Other (Home Office)
    5. Allowance – Other (Transport/Fares)
    6. Allowance – Other (General)
  1. Lump Sum W
  1. Salary Sacrifice Super (S)
  2. Salary Sacrifice Other Employee Benefits (O)


Updated Lump Sum E

A change was also implemented to granular reporting for Lump Sum E. Each financial year relevant to the Lump Sum E amount paid must now be included in the pay event prior to finalisation of the payee Income Statement. Lump Sum E payments can report 10 historical financial years per Income Type.

We have added a new field Financial Year for Lump Sum E that contains up to 10 previous Financial Years and 3 future Financial Years.

Users must assign a Financial Year to their existing Lump Sum E whenever possible in order to report it accordingly. It is necessary to create one per Financial Year.


Company file post-upgrade

No existing Tax Tracking Types will be updated during the Company file upgrade process except for the Allowances as they were updated to the new Allowance name.

STP PHASE 1

STP PHASE 2

Allowances - Car

Allowance – Cents per Kilometre

Allowances - Transport

Allowance – Award Transport Payments

Allowances - Meal

Allowance – Overtime Meal Allowances

Allowances - Travel

Allowance – Domestic or Overseas Travel and Accommodation

Allowances - Laundry

Allowance - Laundry

Allowances - Other

Allowance – Other (General)


However, if certain Payroll Items are created anew, the default Tax tracking type has been updated for these pay items.

PAYROLL ITEM

STP PHASE 1

STP PHASE 2

Holiday Pay

Gross Payments

Leave – Other Paid Leave (O)

Sick Pay

Gross Payments

Leave – Other Paid Leave (O)

Paid Parental Leave

Gross Payments

Leave – Paid Parental (P)

Overtime Pay

Gross Payments

Overtime

Bonus

Gross Payments

Bonus and Commissions


Updating records

There are two ways to update the Tax tracking type on the employee record:

  1. Manually – by editing each Payroll item.
  2. Migration Assistant – use the utility for STP Phase 2 Setup under the Employees menu.


Messaging

For the new Tax Tracking Types, an on-screen text is displayed to provide information about the selected tax tracking. It will also include a link to the ATO website about the payment type.


IIF Files

The IIF File has been updated to recognise the new Tax Tracking Type names.

Need more help?

Ask the Reckon Community at: https://community.reckon.com/

Or Log a Support Ticket: https://www.reckon.com/au/support/


How did we do?

STP Phase 2 - Tax Tracking Type changes in Reckon Accounts

Related Articles

Single Touch Payroll Phase 2 Overview
How to prepare for Single Touch Payroll Phase 2 - Reckon Web
STP Phase 2 - Payment type codes in Reckon Accounts
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