Report qualifying earnings correctly for employees under 18 in payroll app

Learn how to correctly report qualifying earnings for your employees who are under the age of 18. Learn how to correctly report qualifying earnings for employees under the age of 18.

About qualifying earnings and employees under 18

Under Payday Super, super guarantee and super payments made under collective agreements are calculated from an employee's qualifying earnings (QE). Qualifying earnings is a Single Touch Payroll (STP) reporting category which includes payments from ordinary hours of work, and some other payments. Qualifying earnings must be reported to the ATO as part of your pay runs and other STP submissions.

Qualifying earnings does not need to be reported when employees under the age of 18 work 30 hours or less in a week (based on the actual number of hours worked in the week, not an average across fortnightly or monthly pay periods). If you have employees under the age of 18 who work 30 hours or less in any week, you need to create specific pay items to use for these hours, which are set up so that they don't report QE. When your employee works 30 hours or less in a week, you'll use these pay items in the pay run to ensure correct STP reporting.

If your under-18 employee works more than 30 hours in a week, you can use a typical earnings pay item that is set to report as QE.

Learn from the ATO about super obligations for employees under the age of 18.

Create an earnings item that doesn't report as QE

To create an earnings item that will not be reported as QE:

  1. Tap on the Settings icon on the footer navigation bar, then tap on Earnings items.
  2. Tap on the add symbol (+) on the top right of the screen, then select Ordinary earnings.
  3. Enter an Earning item name. Use a name that allows you to easily recognise this item and know that it does not report as QE.
  4. (Optional) Enter a Description. You could provide extra context here, such as "Use for employees under 18 who work 30 hours or less in a week and don't need to report as QE".
  5. Select a Pay rate basis.
  6. Select an Expense account for the item.
  7. If you want to include in time worked leave accruals, select the Include in time worked leave accruals checkbox.
  8. The Tax applicable checkbox will be selected by default - check that this is correct, and check the Calculation method.
  9. Unselect Report as qualifying earnings checkbox so the earning item doesn't report as QE.
  10. Under Superannuation preferences, select the superannuation pay items you wish to have calculated on this pay item when it's used in a pay run.
In Reckon Payroll app, we don't automatically calculate superannuation based on whether a pay item is reported as qualifying earnings. When you include superannuation pay items on your earnings, allowances, deductions, and leave items, we'll calculate super on those pay items, whether they're reported as qualifying earnings or not.
  1. Click Done to save.

Use the pay item when the employee works 30 hours or less

When your under-18 employee works 30 hours or less in a week, you will then include this pay item in the pay run instead of your other earnings items for that week.

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