Most helpful replyATO Certified Response
ATO Certified Response11 May 2023
Hiya @NatCon
We have to determine the purpose and circumstances of a payment in order to determine how to treat it for tax, super and STP2. So, let's look at what the payment you are making is for: the employer is paying monies due to an absence on parental leave in addition to paying Government Paid Parental Leave.
Both of these things fit the definition of Paid Leave-P (Parental Leave) as per the excellent ATO STP2 Employer Guidance.
It's not an additional ABSENCE, as the employee is fully absent on "unpaid leave" - except you are now paying them some money for that absence, so it's NOT UNPAID. Leave is made up of two parts: time and pay:
- The time is already accounted for as parental leave, you are not offering them additional leave.
- The pay is accounted for, as it's not unpaid, because the government is paying PART and you are also PAYING a part.
- For super guarantee purposes, salary or wages paid in respect of parental leave are not OTE as per ATO SGR 2009/2 P59B. It cannot be reported as Gross, as the guidance states that it's only for payments that are OTE.
It appears that the PAYMENT is very clearly Paid Leave-P.
Deanne
Author: Nat_tax(Enthusiast)Enthusiast 11 May 2023
Hi Deanne,
Thank you for your reply.
Is there any cause for concern around the fact there's no delineation between paid leave and leave top up under STP? Particularly as it affects eligibility? Per Service Australia website -
Your employer may pay you a top up payment to supplement your Dad and Partner Pay. For example, they may pay the difference between your Dad and Partner Pay and your normal wage. This won't affect your eligibility. We don’t consider a top up payment as paid leave for the purposes of Dad and Partner Pay.
I may be giving inter-agency communication too much credit, but I wouldn't want top-up pay interpreted as 'paid leave' to impact an employee's eligibility.
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