STP Phase 1 – 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.  To ensure this is configured in Moveware correctly, you will need to review your Master payroll category setup. 

The following information relates to (but is not limited to) Allowances, Eligible Termination Payments including Death Benefits and Early Retirement, Lump Sum amounts that must be shown separately (such as Annual Leave on Termination), Salary Sacrifice, Union Fees and Workplace Giving. 

For more information on which payments must be categorised separately for tax reporting purposes, please seek advice from your Accountant or the Australian Taxation Office.

To review your Master Payroll Categories:

1. Go to the Employees -> Payroll Admin menu and select Payroll Categories.

2. Select an Allowance payroll category and assign the appropriate Allowance code to the category.  Do this by double clicking on the Allowance field, selecting the appropriate Allowance Code and clicking OK, then clicking Save to save the changes.

Note: Using Allowance Code A will send the data for the category to the ATO as “Allowance-Other”.

When you click Save, 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.

To ensure payroll categories are configured correctly to be included in Taxable income and Ordinary Time Earnings, you must ensure the “Tax Exempt” field is set to “N”.  If the category should not be included in Taxable income and Ordinary Time Earnings, then set the “Tax Exempt” field to “Y”.

Similarly, if a payroll category is to be included for the purposes of calculating the Superannuation applicable for a pay, then the “Super Applies” field must be set to “Y”.  Otherwise, set the “Super Applies” field to “N” to exclude it from.

For more information on which payments are tax exempt or are included for Superannuation calculation purposes, please seek advice from your Accountant or the Australian Taxation Office.