How do I create a non reportable allowance in payroll - Xero payroll

(Newbie)Newbie

3 July 2025

I want to set up an allowance payment for overtime meal allowances in Xero.

This allowance is below the ATO reasonable rate and therefore I do not want it to appear on the Income Statement at year end.

It is exempt from Superannuation and PAYG and not reportable at W1. I have tried looking for answers on Xero central but no luck as they still haven't fixed the issue and people have been logging the same queries from the last five years.

If possible, are we allowed to set that up as a reimbursement under the payroll settings in xero being a overtime meal allowance and not reportable - Would that be considered okay ?

0 likes

476 views

1 replies

476 views

1 replies

All replies

PayrollDeanne

(Taxicorn)Taxicorn

5 July 2025

Hiya @raza.a 👋

That isn't a question for the ATO community 😉 I don't know anything about that product, but I googled it and found their guidance about setting up the code as a reimbursement and select the correct Type for reporting.

Not how most payroll products work, as it absolutely is not a reimbursement, but I guess it's how they could make it work 🤔

I can't offer anything else but to search their support as it's a very standard allowance 🤓

Deanne

2 likes

Liked by raza.a and JenniferATO

How do I create a non reportable allowance in payroll - Xero payroll

All replies

Featured articles

Tax tips for managing your side hustle

Tax on gifts and inheritances

How much tax should I pay on a second job? Claiming the tax-free threshold

Top liked users

Top contributors

Explore tax & super topicsExplore tax & super topics

About usAbout us