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STP Single Touch Payroll and Salary Sacrifice - ATO reporting guidlelines please

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Devotee Registered Tax Practitioner

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Has the ATO released some guidelines for employers, on how to process employee pays with a salary-sacrifice element, under the new STP system ?

 

Currently I'm aware of two approaches taken by non-profit orgganisations, to the salary-sacrified portion of an employee's wage or salary:

(1) Treat it as a non-taxable wage/salary item - that goes into their gross salary / wage  OR

(2) Treat it as a negative pre-tax deduction

 

Currently there doesn't seem to be an ATO Reporting Category for Salary Sacrifice - Non-Taxable.

 

In the new version of MYOB AccountRight - version 2018.2 - there's an ATO Reporting Category called Not-Reportable, but I'm unsure as to whether this should be used for the Salary Sacrifice component of an employee's pay.

 

Salarly-sacrifice is widely used by government-funded non-profit community services where I live, in Northern Australia

- e.g. community medical services.

 

>>These organisations would appreciate some guidance on this, before STP starts on 1 July.

 Alternatively, they may have to apply to defer their implementation of STP; until this issue is sorted-out and software suppliers update their programs and offer specific guidelines and training. You may like to see the STP discussions on the MYOB and Xero Community Forums.

This issue has been raised at the ATO Community Forums held recently in Darwin.

Kym Yeoward CPA ACIS

Registered BAS Agent

MYOB, Xero and QuickBooks Accredited Adviser / Consultant

Darwin

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ATO Certified Response

Community Support

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Hi @KYeoward,

 

Thanks for getting in touch!

 

It seems your query relates to changes to the reportable fringe benefit amount (RFBA) reporting on the payment summary last year. The rules of how an exemption is determined haven’t changed in STP reporting; it is the same as it was with payment summary reporting.

 

PAYEVNTEMP125 and PAYEVNTEMP126 are the relevant fields in the STP report but they read a little differently to how RFBA reporting is set out on a payment summary. Currently, RFBA is reported and a box is ticked as to whether the employer is exempt. If the employee changes to a new role and a previous exemption is no longer applicable, or vice versa, then a second payment summary would be required to report that RFBA. In STP there is simply a field for RFBA with the exemption and RFBA without the exemption.

 

There is information in payment summary instructions on how or who the exemption applies to, with links to FBT guides that have information on capping thresholds.

 

Thanks, JodieH.

1 REPLY 1
Highlighted

Most helpful response

ATO Certified Response

Community Support

Replies 0

Hi @KYeoward,

 

Thanks for getting in touch!

 

It seems your query relates to changes to the reportable fringe benefit amount (RFBA) reporting on the payment summary last year. The rules of how an exemption is determined haven’t changed in STP reporting; it is the same as it was with payment summary reporting.

 

PAYEVNTEMP125 and PAYEVNTEMP126 are the relevant fields in the STP report but they read a little differently to how RFBA reporting is set out on a payment summary. Currently, RFBA is reported and a box is ticked as to whether the employer is exempt. If the employee changes to a new role and a previous exemption is no longer applicable, or vice versa, then a second payment summary would be required to report that RFBA. In STP there is simply a field for RFBA with the exemption and RFBA without the exemption.

 

There is information in payment summary instructions on how or who the exemption applies to, with links to FBT guides that have information on capping thresholds.

 

Thanks, JodieH.