Pay Types Explained
Pay Types, which consist of pay rates, Allowances, and Deductions, facilitate processing Payees' payments within a pay run.
Single Touch Payroll Phase 2 allows these Pay Types to be disaggregated from Gross, reported to the ATO as separately itemised components within the Income Stream Collection (where applicable), and then passed to multiple Government Agencies. This reporting method also assists in administering the Social Security system.
Due to the stringent requirements surrounding payments, we have pre-configured System Default Pay Rates, Allowances, and Deductions based on the ATO's documentation. This also affects the changes you can make when each of these is copied. We have preconfigured these Pay Types for you to help with these new reporting obligations and remove the complexity. We have outlined several different Awards in the system default pay types documentation as examples of when these payments may be applicable. Still, the Pay Types listed may apply to numerous other Awards.
System Default Pay Types Explained
- Pay Rates
- Allowances
- Deductions
System Default, User Modified, and All Pay Types filter the results shown in the Pay Types List. By default, System Default is selected.
Search enables you to enter information to filter the results shown in the Pay Types List.
The Pay Types List displays the Description, Payment Type, Category, Income Stream, Database Type Code, Value, Paid By and Status.
The Actions Button enables you to perform the following actions based on the Pay Type selected;
- If a System Default Pay Type is selected, you can Copy or View
- If a User Modified Pay Type is selected, you can Copy, Edit or View
Showing X to X of X entries. Show X entries allow you to select how many Pay Types you would like displayed per page.
Pagination Controls allows you to navigate between the Pay Types pages.
System Default Allowances
Allowances, along with the required pay rates and deductions, are used as pay lines when processing a Pay Run. We have provided the most commonly required Allowances as System Defaults (Templates) that can be used "as is" or copied and modified to suit your requirements. Allowances are separated into their own category for ease of use and split into two categories: Reportable and Non-Reportable.
With Single Touch Payroll Phase 2, there have been significant changes to the reporting of Allowances. In STP Phase 1, some Allowances were reported as part of Gross, and others were reported separately.
All Allowances are now reported separately using the following codes in STP Phase 2: Please refer to the ATO for detailed guidance for separately reported Allowance Types.
STP Phase 1 Code | STP Phase 1 Description | STP Phase 2 Type Code | STP Phase 2 Description |
CAR | Car expense. | CD | Cents per Kilometre. |
TRANSPORT | Award Transport. | AD | Award Transport Payments. |
LAUNDRY | Laundry Allowance. | LD | Laundry Allowance. |
MEALS | Overtime Meal Allowance. | MD | Overtime Meal Allowance. |
TRAVEL | Travel Allowance. | RD | Travel Allowance. |
OTHER | Other Allowance. | OD | Other Allowances. |
TD | Tool Allowance. | ||
KN | Task Allowances. | ||
QN | Qualification Allowances. |
Allowances
Description | W1 (Total of Salary, Wages & other payments); | Taxable | OTE (SGAA) | Allowance Type Code (PAYEVNTEMP7) | Other Allowance Description (PAYEVNTEMP8) | Reported as |
---|---|---|---|---|---|---|
Yes | No | No | AD | Allowances* (PAYEVNTEMP226) |
||
Yes | No | No | CD | Allowances* (PAYEVNTEMP226) | ||
Car - Cents per Kilometre (≤ Approved Rate & > ATO Measure) (S&W) | Yes | Yes | No | CD | Allowances* (PAYEVNTEMP226) | |
Car - Cents per Kilometre (≤ Approved Rate & > ATO Measure) (S&W & OTE) | Yes | Yes | Yes | CD | Allowances* (PAYEVNTEMP226) | |
Car - Cents per Kilometre (> Approved Rate & ≤ ATO Measure) (S&W) | Yes | Yes | No | CD | Allowances* (PAYEVNTEMP226) | |
Car - Cents per Kilometre (> Approved Rate & ≤ ATO Measure) (S&W & OTE) | Yes | Yes | Yes | CD | Allowances* (PAYEVNTEMP226) | |
Car - Cents per Kilometre (> Approved Rate & > ATO Measure) (S&W) | Yes | Yes | No | CD | Allowances* (PAYEVNTEMP226) | |
Car - Cents per Kilometre (> Approved Rate & > ATO Measure) (S&W & OTE) | Yes | Yes | Yes | CD | Allowances* (PAYEVNTEMP226) | |
Supplemental, Industry, Disability, Tasks, Activities and Skill Level Allowance (S&W) | Yes | Yes | No | KN | Allowances* (PAYEVNTEMP226) | |
Supplemental, Industry, Disability, Tasks, Activities and Skill Level Allowance (S&W & OTE) |
Yes | Yes | Yes | KN | Allowances* (PAYEVNTEMP226) | |
Laundry Allowance (Approved Uniform, ≤ ATO Measure) | Yes | No | No | LD | Allowances* (PAYEVNTEMP226) | |
Laundry Allowance (Approved Uniform, > ATO Measure) (S&W & OTE) |
Yes | Yes | Yes | LD | Allowances* (PAYEVNTEMP226) | |
Yes | Yes | No | MD | Allowances* (PAYEVNTEMP226) | ||
Laundry Allowance (Conventional Clothing) (S&W & OTE) | Yes | Yes | Yes | OD | General | Allowances* (PAYEVNTEMP226) |
Overseas Accommodation Allowance (S&W) | Yes | Yes | No | OD | General | Allowances* (PAYEVNTEMP226) |
Yes | Yes | Yes | OD | General | Allowances* (PAYEVNTEMP226) | |
Home Office Allowance (S&W) | Yes | Yes | No | OD | Home Office | Allowances* (PAYEVNTEMP226) |
Yes | Yes | Yes | OD | Home Office | Allowances* (PAYEVNTEMP226) | |
Yes | Yes | No | OD | Non-deductible | Allowances* (PAYEVNTEMP226) | |
Award Transport or Fares Allowance (Private Purposes) (S&W & OTE) | Yes | Yes | Yes | OD | Non-deductible | Allowances* (PAYEVNTEMP226) |
Domestic Travel Allowance (Non-LAFH / Private Purposes) (S&W) | Yes | Yes | No | OD | Non-deductible | Allowances* (PAYEVNTEMP226) |
Domestic Travel Allowance (Non-LAFH / Private Purposes) (S&W & OTE) | Yes | Yes | Yes | OD | Non-deductible | Allowances* (PAYEVNTEMP226) |
Laundry Allowance (Private Purposes) (S&W & OTE) | Yes | Yes | Yes | OD | Non-deductible | Allowances* (PAYEVNTEMP226) |
Overseas Accommodation Allowance (Private Purposes) (S&W) | Yes | Yes | No | OD | Non-deductible | Allowances* (PAYEVNTEMP226) |
Overseas Accommodation Allowance (Private Purposes) (S&W & OTE) | Yes | Yes | Yes | OD | Non-deductible | Allowances* (PAYEVNTEMP226) |
Overseas Meals & Incidentals Allowance (Private Purposes) (S&W) | Yes | Yes | No | OD | Non-deductible | Allowances* (PAYEVNTEMP226) |
Overseas Meals & Incidentals Allowance (Private Purposes) (S&W & OTE) | Yes | Yes | Yes | OD | Non-deductible | Allowances* (PAYEVNTEMP226) |
Other Vehicle - Cents per Kilometre (S&W) | Yes | Yes | No | OD | Private Vehicle | Allowances* (PAYEVNTEMP226) |
Yes | Yes | Yes | OD | Private Vehicle | Allowances* (PAYEVNTEMP226) | |
Award Transport or Fares Allowance (S&W) | Yes | Yes | No | OD | Transport/Fares | Allowances* (PAYEVNTEMP226) |
Yes | Yes | Yes | OD | Transport/Fares | Allowances* (PAYEVNTEMP226) | |
Private Purpose - Cents per Kilometre (S&W) | Yes | Yes | No | OD | C/Km Home to Office | Allowances* (PAYEVNTEMP226) |
Yes | Yes | Yes | OD | C/Km Home to Office | Allowances* (PAYEVNTEMP226) | |
Uniform or Grooming Allowance (S&W) | Yes | Yes | No | OD | Uniform | Allowances* (PAYEVNTEMP226) |
Yes | Yes | Yes | OD | Uniform | Allowances* (PAYEVNTEMP226) | |
Qualifications, Certificates, Licence Fees and Insurance Allowance (S&W) | Yes | Yes | No | QN | Allowances* (PAYEVNTEMP226) | |
Qualifications, Certificates, Licence Fees and Insurance Allowance (S&W & OTE) |
Yes | Yes | Yes | QN | Allowances* (PAYEVNTEMP226) | |
Domestic Travel Allowance (> ATO Measure) (S&W) | Yes | Yes | No | RD | Allowances* (PAYEVNTEMP226) | |
Domestic Travel Allowance (> ATO Measure) (S&W & OTE) | Yes | Yes | Yes | RD | Allowances* (PAYEVNTEMP226) | |
Overseas Meals & Incidentals Allowance (> ATO Measure) (S&W) | Yes | Yes | No | RD | Allowances* (PAYEVNTEMP226) | |
Overseas Meals & Incidentals Allowance (> ATO Measure) (S&W & OTE) |
Yes | Yes | Yes | RD | Allowances* (PAYEVNTEMP226) | |
Tools Allowance (S&W) | Yes | Yes | No | TD | Allowances* (PAYEVNTEMP226) | |
Yes | Yes | Yes | TD | Allowances* (PAYEVNTEMP226) | ||
Overtime Meals Allowance (≤ ATO Measure) | No | No | No | Not reported in STP Phase 2 | ||
Overseas Meals & Incidentals Allowance (≤ ATO Measure) | No | No | No | |||
No | No | No |
For the Allowances that are considered Taxable, PAYGW is calculated per the applicable Taxation Schedule (Tax Scale) based on the Payees Tax Treatment & Tax Treatment Code,
System Default Deductions
Deductions, in addition to the required pay rates and allowances, are used on pay lines when processing a Pay Run. We have provided the most commonly required Deductions as System Defaults (Templates) that can be used "as is" or copied and modified to suit your requirements.
For ease of use, Deductions are separated into two categories: Salary Sacrifice - decrease the Payees Gross Pay (before PAYGW is calculated) and After PAYGW - decrease the Payees Net Pay (after PAYGW is calculated).
Single Touch Payroll Phase 2 has resulted in changes to the Deductions reporting. Previously, only salary sacrifices for superannuation were itemised separately.
An * indicates a Tuple; else, it is a Fact within the STP file used when reporting to the ATO.
Description | Include in W1 (Total of Salary, Wages & other payments); | Taxable | OTE (SGAA) | Salary Sacrifice Type Code (PAYEVNTEMP266) |
Deduction Type Code (PAYEVNTEMP10) |
Reported as |
---|---|---|---|---|---|---|
Yes Reduces Gross |
Yes Reduces Gross |
Yes | S | Salary Sacrifice (PAYEVNTEMP265)* |
||
Salary Sacrifice (to other benefit) |
Yes Reduces Gross |
Yes Reduces Gross |
No | O | Salary Sacrifice (PAYEVNTEMP265)* |
|
Salary Sacrifice (to other benefit, OTE) |
Yes Reduces Gross |
Yes Reduces Gross |
Yes | O | Salary Sacrifice (PAYEVNTEMP265)* |
|
Salary Sacrifice (to Workplace Giving) |
Yes Reduces Gross |
Yes Reduces Gross |
No | O | Salary Sacrifice (PAYEVNTEMP265)* |
|
|
Yes Reduces Gross |
Yes Reduces Gross |
Yes | O | Salary Sacrifice (PAYEVNTEMP265)* |
|
Child Support Garnishee | No | No | No | G | Deduction (PAYEVNTEMP227)* |
|
Child Support Deduction | No | No | No | D | Deduction (PAYEVNTEMP227)* |
|
Union Fees | No | No | No | F | Deduction (PAYEVNTEMP227)* |
|
Workplace Giving | No | No | No | W | Deduction (PAYEVNTEMP227)* |
|
After Tax Deduction | No | No | No | Not reported in STP Phase 2 | ||
No | No | No |