salary sacrifice for working visa

 Author: PayrollDeanne(Taxicorn)Taxicorn

19 Oct 2022

Hiya @SharonYang25

I know nothing about specifically sacrificing for visa costs!

However, I know a great deal about how to report salary sacrifice amounts via STP2. Given this narrow scope then:

1. Pre-tax deduction - yes, this amount is reported in STP2, as per the excellent ATO STP2 Employer Guidance
2. W1 wages - why would you exclude this amount from W1 wages? Not knowing anything about Xero, I can tell you that the pre-sacrifice amount LESS the salary sacrifice is what you should report as W1 wages (as prior to STP2, you reported "post-sacrifice" as W1). For example, if their pre-sacrifice salary is $3,000 and they've sacrificed $1,000, resulting in a post-sacrifice "gross taxable" pay of $2,000, then you report 3,000 pay in STP2 as Gross and 1,000 sacrifice in STP2 as Salary Sacrifice Type-O (other employee benefits) and the W1 amount is 2,000. However it works in Xero - you need to seek assistance from your DSP about how their product works when it comes to W1 in a pre-sacrifice LESS salary sacrifice world of STP2.
3. Fringe Benefits - sorry, I can only refer you to the excellent ATO FBT Employer Guide for you to determine any obligation you might have for FBT on this arrangement.
4. Tax Return - as I explained in point 2 above, in STP2, Gross is reported as 3,000/FN, Salary Sacrifice is reported as 1,000/FN and the ATO take the salary sacrifice off the pre-sacrifice amount to derive the "gross taxable" income to be pre-filled in their tax return.

I encourage you to read the ATO STP2 Employer Guidance and their STP2 webinars and videos. Materials can be found here.

I hope that helps - Deanne