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STP Phase 2 - STP Tax Category in Reckon Accounts 2023

ATO Requirements

The STP Tax Category is another tax category that identifies the employee's income type that helps ATO determine if the payee is taxed correctly. This is another component used for generating the Tax Treatment Code — Character 1 and 2. The supported categories are:

  1. Regular employees
  2. Actors
  3. Horticulturists and shearers
  4. Seniors and Pensioners
  5. Working Holiday Makers
  6. Seasonal Worker Programs
  7. Foreign resident
  8. No TFN
  9. ATO-defined
  10. Voluntary agreement


Reckon Accounts implementation

Please note, the STP Tax Category is only specific and to be selected if you are an Actor, Horticulturist, Shearer, Senior, or Pensioner.

For regular employees – that are not under the roles above – you can just set their Income Type eg. SAW or CHP and not make a selection under STP Tax Category.

New field for STP tax category

A new STP Tax Category dropdown is available within the employee records in Reckon Accounts 2023 by going to the Payroll and Compensation Info. This field is only applicable for Income Type(s):

  1. SAW – Salary and Wages
  2. CHP – Closely Held Payees

All categories are supported and has to be explicitly selected apart from ATO-defined categories:

ACTOR

HORTICULTURIST AND SHEARERS

SENIORS AND PENSIONERS

  1. Actor – TFT
  2. Actor – No TFT
  3. Actor - Promotional
  4. Actor – Daily Performance
  1. Horticulturists/Shearers – TFT
  2. Horticulturists/Shearers – Foreign Resident
  1. Seniors/Pensioners – Single
  2. Seniors/Pensioners – Member of a couple
  3. Seniors/Pensioners – Illness separated


PAYG Tax Rates are calculated in Reckon Accounts using the Tax Code setting for each employee.

The STP Tax Category fields does not affect any payroll calculation and are used for STP Phase 2 reporting purposes only. Therefore, continue to use the relevant Tax Code for each employee.

For example, an STP Tax Category: Actor – TFT does not require you to change your Tax Code to 2-TFT. If no Tax scale is appropriate, use 8-No TaxC and enter the correct Tax Rate.

Relationship between Tax Category and Tax Codes

TAX CATEGORY

DESCRIPTION

TAX CODE

  1. Actors – TFT
  2. Actors – No TFT
  3. Actors - Promotional
  4. Actors – Daily Performance
  1. Actor with TFT claimed
  2. Actor with No TFT claimed
  3. Actor under Promotional
  4. Actor that had 3 or fewer performances per week

8-No TaxC

Horticulturists/Shearers – TFT

Horticulturists or Shearers with TFT claimed

8-No TaxC

Horticulturists/Shearers – TFT

Horticulturists or Shearers with TFT claimed but no TFN

4-No TFNr

Horticulturists/Shearers – Foreign Resident

Horticulturists or Shearers that are Foreign resident

8-No TaxC

Horticulturists/Shearers – Foreign Resident

Horticulturists or Shearers that are Foreign resident but no TFN

4-NoTFNn

  • Seniors/Pensioners – Single
  • Seniors/Pensioners – Member of a couple
  • Seniors/Pensioners – Illness separated
  1. Seniors or Pensioners claiming Full Medicare Levy Exemption
  2. Seniors or Pensioners claiming Half Medicare Levy Exemption
  3. Seniors or Pensioners using flat or concessional rates (Custom)
  1. 5-FullML
  2. 6-HalfML
  3. 8-No TaxC

Please see the following ATO articles for Tax Rates references:
— Schedule 3 – Tax table for actors, variety artists and other entertainers
— Schedule 2 – Tax table for individuals employed in the horticultural or shearing industry
— Schedule 9 – Tax table for seniors and pensioners


Company file post-upgrade

No STP Tax Category will be assigned to any new or existing Employees after the Company File was upgraded.


Updating records

There are two ways to assign the STP Tax Category on the employee record:

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


IIF Files

The STP Tax Category was added to the IIF file with the header name: STPTAXCATEGORY.



Need more help?

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

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

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