Hi,
We have an allowance paid to some employees that we call a Roster Allowance, the intent of the allowance is to cover the following:
15% shift loading to cover all associated penalties in lieu of weekend penalties
2% on call loading in lieu of the on call allowance
So effectively they are paid 17% loading on all hours worked.
How would this allowance be classified in STP 2?
Thank you
Hiya @SOMP 👋
The introduction of reporting income as disaggregated gross in STP2 was a wake-up call for may employers, to review how they represented the interdependent requirements of Fair Work, tax, super and reporting. It's not so easy, but is the core purpose of payroll.
As part of your readiness to transition, you would have reviewed the pay codes you use, to ensure that you are representing the components of pay as each separate component and not aggregated amounts. Part of that analysis would have involved examining the purpose of each payment to determine if it is comprised of other components and, if so, to separate out those components.
There are exceptions to disaggregating for Fair Work Individual Flexibility Arrangements and one of the three types of Annualised Wage Arrangements (the third option, where the AWA is defined by the specific amount/number of separate components that make up the total AWA amount). If you use that third option, the overtime component must be disaggregated and reported as Overtime (your on-call allowance component). The rest of the AWA amount is reported as Gross.
The issue with what you have included in your Roster Allowance is that one is OTE that would be reported in STP2 as Gross; the other is not OTE that would be reported in STP2 as Overtime. Those are two very different types of payments for superannuation guarantee purposes.
Do you pay SG on the Roster Allowance? If you do, then you could report it as KN Task Allowance. If not, then you have failed to meet your SG requirements on the shift penalty and should complete the Super Guarantee Charge form.
Deanne
Hiya @SOMP 👋
The introduction of reporting income as disaggregated gross in STP2 was a wake-up call for may employers, to review how they represented the interdependent requirements of Fair Work, tax, super and reporting. It's not so easy, but is the core purpose of payroll.
As part of your readiness to transition, you would have reviewed the pay codes you use, to ensure that you are representing the components of pay as each separate component and not aggregated amounts. Part of that analysis would have involved examining the purpose of each payment to determine if it is comprised of other components and, if so, to separate out those components.
There are exceptions to disaggregating for Fair Work Individual Flexibility Arrangements and one of the three types of Annualised Wage Arrangements (the third option, where the AWA is defined by the specific amount/number of separate components that make up the total AWA amount). If you use that third option, the overtime component must be disaggregated and reported as Overtime (your on-call allowance component). The rest of the AWA amount is reported as Gross.
The issue with what you have included in your Roster Allowance is that one is OTE that would be reported in STP2 as Gross; the other is not OTE that would be reported in STP2 as Overtime. Those are two very different types of payments for superannuation guarantee purposes.
Do you pay SG on the Roster Allowance? If you do, then you could report it as KN Task Allowance. If not, then you have failed to meet your SG requirements on the shift penalty and should complete the Super Guarantee Charge form.
Deanne
Thanks Deanne, we pay super on this allowance, and I found the following on the ATO website:
Performing extra duties or working in difficult conditions
Awards and other industrial instruments provide for a wide range of allowances that are paid to compensate the employee for specific tasks or activities performed that involve additional responsibilities, inconvenience, or efforts above the base rate of pay. These allowances are known as services allowances because they are not paid to compensate an employee for expenses they may incur.
When working out how to report in STP about allowances you pay for the purpose of compensating an employee for specific tasks or activities, consider these questions:
24. Is the amount you are paying relating to an expense the employee has incurred or will incur?
· Yes – identify the purpose of the allowance.
· No – continue to the next question.
25. Does the allowance you are paying relate to working conditions or performing additional duties?
· Working conditions – report as task allowances (allowance type KN).
· Performing additional duties – continue to the next question.
26. Are you paying the employee for the additional duties with an allowance, an increase to base salary (for example, an employee performing higher duties may either receive a higher duties allowance or be advanced to a higher pay point), or a different kind of payment?
· Allowance – report as task allowances (allowance type KN) .
· Higher base salary or different kind of payment – report as the appropriate payment type (such as Gross).
Based on this and your response, the allowance has been put as Task.
Thank you for your prompt response.
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