Table of Contents
STP Phase 2 - How Tax Treatment Code is designated in Reckon Accounts 2023
A valid Tax Treatment Code is automatically and dynamically generated in Reckon Accounts 2023 based on:
- Tax category – Character 1 and 2
- Options available for each tax category – Character 1 and 2
- Study and training support loans (STSL) – Character 3
- Medicare levy surcharge – Character 4
- Medicare levy exemptions – Character 5
- Medicare levy reduction – Character 6
Characters
Character 1 and 2
Characters 1 and 2 are defined by the following fields in the employee record:
- Income Type
- STP Tax Category
- Tax Code
Character 3
Character 3 is based on the Study and Training Support Loans (STSL) if permissible.
- True =
"S" - False =
"X"
Character 4
Character 4 is based on the Medicare Levy Surcharge (MLS) if permissible. When a Medicare Levy Surcharge is selected:
- Blank =
"X" - 1.00% =
"1" - 1.25% =
"2" - 1.50% =
"3" - Medicare Levy Exemption (Character 5) will be
"X" - Medicare Levy Reduction (Character 6) will be
"X"
Character 5
Character 5 is based on the Medicare Levy Exemption (MLE). This is defined by the use of the Tax Codes: 5-FullML or 6-HalfML.
- 5-FullML =
"F"- Medicare Levy Surcharge (Character 4) will be
"X". - Medicare Levy Reduction (Character 6) will be
"X".
- Medicare Levy Surcharge (Character 4) will be
- 6-HalfML =
"H"- Medicare Levy Surcharge (Character 4) will be
"X". - Medicare Levy Reduction (Character 6) will be available.
- Medicare Levy Surcharge (Character 4) will be
Character 6
Character 6 is based on the Medicare Levy Reduction (MLR) based on family taxable income below a certain threshold and consideration of the Number of Dependants.
- Blank =
"X" - Spouse only =
"0" - 1 to 9 =
"1" to "9" - 10+ =
"A" - Medicare Levy Surcharge (Character 4) will be
"X". - Medicare Levy Exemption (Character 5) can be set to None or Half.
Scenarios with Income Type only
Regular Employee
The following uses the Income Type(s):
SAW - Salary and WagesCHP - Closely Held Payees
SCENARIO | TAX CODE | Character 1 and 2 | Character 3 (STSL) | Character 4 (MLS) | Character 5 (MLE) | Character 6 (MLR) |
No TFT claimed | 1-NoTFT | “RN” | Allowed | Allowed | Not permissible | Not permissible |
With TFT claimed | 2-TFT | “RT” | Allowed | Allowed | Not permissible | Allowed |
Full exemption | 5-FullML | “RT” | Allowed | Not permissible | Allowed | Not permissible |
Half exemption | 6-HalfML | “RT” | Allowed | Not permissible | Allowed | Allowed |
Custom Tax | 8-No TaxC | “RT” | Allowed | Allowed | Not permissible | Allowed |
Foreign Resident | 3-NonRes | “FF” | Allowed | Not permissible | Not permissible | Not permissible |
Australian resident with no TFN | 4-NoTFNr | “NA” | Not permissible | Not permissible | Not permissible | Not permissible |
Foreign resident with no TFN | 4-NoTFNn | “NF” | Not permissible | Not permissible | Not permissible | Not permissible |
Working Holiday Maker
The following uses the Income Type: WHM - Working Holiday Makers
SCENARIO | TAX CODE | Character 1 and 2 | Character 3 (STSL) | Character 4 (MLS) | Character 5 (MLE) | Character 6 (MLR) |
WHM employee under a Registered Employer | 8-No TaxC | “HR” | Not permissible | Not permissible | Not permissible | Not permissible |
WHM employee under an Unregistered Employer | 8-No TaxC | “HU” | Not permissible | Not permissible | Not permissible | Not permissible |
WHM employee but a foreign resident with no TFN | 4-No TFNn | “HF” | Not permissible | Not permissible | Not permissible | Not permissible |
Seasonal Worker
The following uses the Income Type: SWP - Seasonal Worker Programme
SCENARIO | TAX CODE | Character 1 and 2 | Character 3 (STSL) | Character 4 (MLS) | Character 5 (MLE) | Character 6 (MLR) |
Employee under the Seasonal Worker Programme | 8-No TaxC | “WP” | Not permissible | Not permissible | Not permissible | Not permissible |
Voluntary Agreement
The following uses the Income Type: VOL - Voluntary Agreement
SCENARIO | TAX CODE | Character 1 and 2 | Character 3 (STSL) | Character 4 (MLS) | Character 5 (MLE) | Character 6 (MLR) |
Using CIR | 8-No TaxC | “VC” | Not permissible | Not permissible | Not permissible | Not permissible |
CIR not used | 8-No TaxC | “VO” | Not permissible | Not permissible | Not permissible | Not permissible |
Scenarios with STP Tax Category
Actor
Income Type:
SAW - Salary and WagesCHP - Closely Held Payees
STP Tax Category:
Actor - TFTActor - No TFTActor - Daily PerformanceActor - Promotional
SCENARIO | TAX CODE | Character 1 and 2 | Character 3 (STSL) | Character 4 (MLS) | Character 5 (MLE) | Character 6 (MLR) |
Actor with No TFT claimed | 8-No TaxC | “AN” | Not permissible | Not permissible | Not permissible | Not permissible |
Actor with TFT claimed | 8-No TaxC | “AT” | Not permissible | Not permissible | Not permissible | Not permissible |
Actor under Promotional | 8-No TaxC | “AD” | Not permissible | Not permissible | Not permissible | Not permissible |
Actor that had 3 or less performances per week | 8-No TaxC | “AP” | Not permissible | Not permissible | Not permissible | Not permissible |
Horticulturist and Shearer
Income Type:
SAW - Salary and WagesCHP - Closely Held Payees
STP Tax Category:
Horticulturist/Shearer - TFTHorticulturist/Shearer - Foreign Resident
SCENARIO | TAX CODE | Character 1 and 2 | Character 3 (STSL) | Character 4 (MLS) | Character 5 (MLE) | Character 6 (MLR) |
With TFT claimed | 8-No TaxC | “CT” | Not permissible | Not permissible | Not permissible | Not permissible |
With TFT claimed but no TFN | 4-No TFNr | “CT” | Not permissible | Not permissible | Not permissible | Not permissible |
Foreign resident | 8-No TaxC | “CF” | Not permissible | Not permissible | Not permissible | Not permissible |
Foreign resident but no TFN | 4-No TFNn | “CF” | Not permissible | Not permissible | Not permissible | Not permissible |
Senior and Pensioner
Income Type:
SAW - Salary and WagesCHP - Closely Held Payees
STP Tax Category:
Senior - SingleSenior - Member of a coupleSenior - Illness Separated
SCENARIO | TAX CODE | Character 1 and 2 | Character 3 (STSL) | Character 4 (MLS) | Character 5 (MLE) | Character 6 (MLR) |
Full exemption | 5-FullML |
| Allowed | Not permissible | Allowed | Not permissible |
Half exemption | 6-HalfML |
| Allowed | Not permissible | Allowed | Allowed |
Custom Tax | 8-No TaxC |
| Allowed | Allowed | Not permissible | Allowed |
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