STP Phase 2 – Payroll Category Configuration

Payroll Categories need to be configured correctly to ensure the data from each category is sent to the ATO in the appropriate format. The categorisation of all payroll categories has changed since STP Phase 1, so you will need to go through each payroll category and correctly categorise them based on the new codes. Changes will need to be made to the Master payroll categories under Employees -> Payroll Admin -> Payroll Categories.

For more information on the meaning of the new codes and the impact it has on your payroll, please seek advice from your Accountant or the Australian Taxation Office.

There are two key changes to make to your payroll categories:

1. A ‘subcategory’ must be selected for categories Wages and Deductions. Subcategory is a new field that can be found under the Category field.

2. A ‘code’ must be selected, if available. If there is an existing code in this field, it must be updated in line with STP Phase 2 codes. The available codes will vary based on the category and/or subcategory selected.

Payroll Category Setup:

The table below shows a complete list of possible codes, broken down by category and sub category.

When you click Save after making changes to Master payroll categories, you will be prompted to update all Employees who have this category.  You must click Yes to update the employees that have already this category for the new configuration to work for Single Touch Payroll.

CAUTION – Selecting the “Include Regular, Fixed Rate and Fixed Amount” option and selecting Yes will also update the rate assigned to the Employee from the rate on the category. DO NOT select this option if you have set up custom payroll rates against Employees for the current category. Selecting the option IS NOT needed to update the allowance code for the category against the Employees.