How is leave without pay (unpaid personal leave, annual leave, etc) reported for STP2?

 Author: PayrollDeanne(Taxicorn)Taxicorn

1 June 2026

G'day @PayCompliance 👋

When the amounts are zero, what are you worried about? 🤔

You have two options, both are correct:

1. Report these amounts to the relevant Payment Type that applies to that type of leave when paid. That is, personal leave full pay = Paid Leave Type O. Personal leave half pay = Paid Leave Type O. Personal leave without pay = Paid Leave Type O.
2. Don't report the LWOP amounts and then account for them every time you perform validations on all your payments, to ensure that you have adequately accounted for every payment to your employees in STP2. For example, depending on your payroll, you may validate where all your pay codes are reporting before you even commence your pay production process. You may find discrepancies for reimbusements (not reportable) through payroll, overtime meal allowances that do not exceed the ATO reasonable amount (not reportable), travel allowances that do not exceed the ATO reasonable amounts (not reportable). It might just be these same pay codes every pay when you check. You can add all the LWOP if you want, but that makes this validation exercise a little bit longer, a little bit harder.

I've always recommend that you report LWOP to the same Payment Type in STP2 as the paid counterpart. That way, it's accounted for and the amounts are always zero 😉

STP2 is about reporting payments subject to withholding only, but I like a nice, tight governance of payroll 😇

Deanne