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12 July 2025

Hello all,


Joined up here with it being the weekend before trying to call the ATO during the week. So I work for a government department where I am offered subsidised housing that I salary sacrifice directly from my pay that is now handled in house by the department.


In previous years it was done through a salary packaging company and was listed on my income statement as


“Salary sacrifice type

Other employee benefits”


with the associated amount included in that which directly reduced the gross income reported to the ATO. Since the department took over early last year, this has not been the case. The income reported by them to my income statement is the same gross amount as what I can see on the payment portal through my department.


I contacted payroll about this as their own FAQ says that any amount that’s salary sacrificed will be reported to the ATO as just a reduction in the gross salary amount which isn’t the case. They basically dismissed me saying it’s an issue with the ATO and I have to sort it out with them where I believe it’s an issue with the way the department is declaring this income.


So at the moment I’m staring down having to pay tax on approx $7k of extra income that should have been salary sacrificed (and has been by the department but apparently not with the ATO).


Can anyone give me some guidance on this whether this is an ATO issue or should I basically try and rip the department’s payroll a new one for trying to dismiss me when it’s (IMHO) an issue that they have caused as they’re the ones inputting the figured with STP?


Hopefully this all makes sense and isn’t too much to figure out, I did try and make it brief…

632 views
4 replies
632 views
4 replies

All replies

PayrollDeanne(Taxicorn)Taxicorn
12 July 2025

Hiya @Whoknowswho 👋


STP2 requires employers to send disaggregated gross. That means Gross is reported as the pre-sacrificed amount and to also report salary sacrifice amounts.


When the ATO prefills, they deduct the salary sacrifice from the pre-sacrifice Gross.


The excellent ATO STP2 Employer Guidance explains it in detail 🤓


Deanne

13 July 2025

Hi Deanne,


Thank you for the reply. I had read that page previously in my research beforehand which is even more reason why I believed the department have stuffed something up even though they claim it’s the ATO who has.


So based on that page, the gross amount should be reported as it is but there should also be the “Salary Sacrifice type” with the amount of my housing salary sacrifice, as previous years with a 3rd party salary packaging provider, correct?


Just trying to build my case for when I have to go back to payroll, I’m still in some doubt that that a government department can make such a mistake like this though in all honesty…

13 July 2025

@PayrollDeanne

Thanks again for that. I figured it should be the same but payroll is denying it’s their issue and it’s to do with the ATO not including the information.


Even more worrying is the FAQ states that any salary sacrifice amount will reduce the gross salary reported to the ATO as well which is clearly incorrect too.


Very worrying considering that this impacts thousands of people in the department which makes me think how I could possibly be the only one to notice this already too..

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Income statement including salary sacrificed information | ATO Community