You need to assign an ATO reporting category to each of the wage, deduction and superannuation pay items you use. This lets the ATO know how to treat each type of payment you're reporting through Single Touch Payroll (STP).
Which ATO reporting category should I assign?
As your business, award and employee agreements are unique, we can't tell you which ATO reporting categories you should assign to your pay items.
However, you can use the descriptions of reporting categories below to guide you.
If you need more help:
consult your accounting advisor
ask questions and learn from others at the community forum
check the employer reporting guidelines on the ATO website: STP Phase 1 | STP Phase 2
What is each ATO reporting category for?
Use this information to work out which reporting categories you need to assign to your pay items.
Wages
Just created a new MYOB Business file?
To speed things up and prevent key payments being reported incorrectly to the ATO, the ATO reporting category will be automatically assigned for you in these wage pay items:
Base Hourly
Base Salary
Annual Leave Pay
Personal Leave Pay
Overtime (1.5)
Overtime (2x)
ATO reporting category | More information | ATO links |
|---|---|---|
Gross payments | Include pay items you use for paying salary and wages. Payments that don’t sit into any of the main categories, assign them to Gross payments (but check this with the ATO). | |
Allowance - cents per km | This includes payments you make to cover your employees’ work-related expenses. For allowances that don’t sit into any of the main categories, assign them to Allowance – Other (but check this with the ATO). | |
Lump Sum A - Termination | Lump sum payments may include pay items such as redundancies, payments in lieu of notice, and payments of annual leave on termination. See the FAQs below for more info on each lump sum type. Lump Sum W — for return to work payments. Lump Sum E is for back payments that accrued, or was payable, more than 12 months before the date of payment and is $1200 or more. Tell me more Lump sum payments are a complex area. Chat to your advisor or check with the ATO for more guidance | |
Exempt Foreign Income | This could be assigned to pay items such as salary, wages, commissions, bonuses and allowances that are exempt from Australian tax. | |
ETP - Taxable component ETP - Tax free component | These are pay items used to track the taxable and tax-free components of employment termination payments. ETPs are concessionally taxed up to a certain limit, or 'cap'. Certain types of termination payments are tax free up to a certain limit, for example, if the ETP is because of redundancy or early retirement. Check with your payroll advisor or the ATO for more guidance. |
Superannuation
An ATO reporting category is required for each superannuation pay item. The ATO reporting categories you can choose from is based on the superannuation Contribution type.
Here's the available ATO reporting categories for superannuation.
ATO reporting category | More information |
Superannuation Guarantee | This information is reported to the ATO to ensure that employee super funds are receiving the correct amounts. Helping you stay compliant with ATO super reporting The ATO reporting category for superannuation pay items with a contribution type of Superannuation guarantee (expense) will be automatically set to Superannuation guarantee. |
Reportable Employer Super Contributions | Used to assign superannuation pay items that are classified by the ATO as Reportable Employer Super Contributions (RESC). |
Salary Sacrifice and RESC | Use this to assign salary sacrifice super pay items. These are classified by the ATO as reportable employer super contributions (RESC). |
Not Reportable | Use this to assign superannuation pay items which are not reportable to the ATO for STP purposes. To clarify if a super pay item is reportable, check with your accounting advisor or the ATO. |
Deductions
ATO reporting category | Description | ATO reference |
|---|---|---|
Deduction - Union/Professional Assoc Fees | This might include pay items for: union fees or memberships to professional associations. | Union fees, subscriptions to associations and bargaining agents fees |
Deduction - Work Place Giving | Assign pay items that are donations made under a workplace giving arrangement. | |
ETP - Tax Withholding | Use this reporting category when an employment termination payment has been made to an employee. | |
Not Reportable | All other deductions are usually considered not reportable. This includes things like loan or car payments. This is because they may not need to be itemised on an employee's tax return. If you're not sure if a deduction is reportable, check with your accounting advisor or the ATO. |
|
Salary sacrifice - other employee benefits | For deductions that are for benefits from an effective salary sacrifice arrangement, including those exempt from FBT. |
Child support deductions
You can't currently report your child support deductions to the ATO via STP from MYOB. This means you can assign Not Reportable as the ATO Reporting Category in your child support deduction pay items.
Taxes
The ATO Reporting Category is automatically assigned for the PAYG Withholding pay item.
ATO reporting category | More information |
PAYG Withholding | This is automatically assigned and can't be changed. |
This category reports all tax withheld from the employee, including any extra PAYG that may be deducted.
Assigning ATO reporting categories
You need to assign ATO reporting categories to all pay items you've used in the current payroll year, and whenever you create a new pay items.
If you're setting up STP for the first time your MYOB business is checked to find any pay items that don't have an ATO reporting category assigned – so you can then assign one. You can also manually check your pay items and, if required, assign an ATO reporting category.
To assign ATO reporting categories
Go to the Payroll menu and choose Pay items.
Click the Wages and salary, Superannuation or Deductions tab.
Click a pay item to view its details.
Choose the applicable ATO reporting category. See above for information to help you select it, or speak to your accounting advisor or the ATO.
Click Save.
Repeat for any other pay items you want to check or update.
FAQs
Which pay items are not reportable?
In most cases, pay items that don't need to be included on an employee's tax return, are not reportable. Depending on your circumstances. this may include pay items for post-tax deductions and deductions that are exempt from fringe benefits tax. For example, loan or car payments.
If you're not sure what reporting category to assign, talk to your accounting advisor or the ATO.
Why can't I choose an ATO reporting category for a pay item?
Some pay items that exist in MYOB by default, like Superannuation Guarantee, have the ATO reporting category set for you and cannot be changed. This ensures those critical pay items are reported correctly to the ATO.
How do I assign salary sacrifice superannuation?
When reporting payroll amounts using Single Touch Payroll, gross wage amounts are reduced automatically by deduction amounts that are marked as a before-tax deductions. This includes salary sacrifice superannuation deductions.
The ATO reporting category Salary Sacrifice and RESC can be used for Salary Sacrifice (deduction) superannuation pay items.
If you're not sure what reporting category to assign, talk to your accounting advisor or the ATO.
What are the types of lump sum payments?
Here's a brief description of each type of lump sum payment. For more details, or to clarify if a payment you're making is a lump sum, check with your accounting advisor or visit the ATO website.
Type | Description |
|---|---|
Lump Sum A - redundancy | Payments of unused long service leave accrued after 17 August 1993 or unused holiday pay and other leave-related payments, where the amount was paid in connection with a payment that includes (or consists of) either – a genuine redundancy payment – an early retirement scheme payment – the invalidity segment of an ETP or super benefit. |
Lump Sum A - termination | Payments of unused long service leave that accrued after 15 August 1978, but before 18 August 1993, or unused holiday pay and other leave-related payments that accrued before 18 August 1993. |
Lump Sum B | Payments for unused long service leave that accrued before 16 August 1978. |
Lump Sum D | The tax-free component of a genuine redundancy payment or an early retirement scheme payment. |
Lump Sum E | An amount of back payment that accrued, or was payable, more than 12 months before the date of payment and is $1200 or more. |
Lump Sum W | A return to work amount that's paid to induce an employee to resume work. For example, to end industrial action or to return from working for another employer. |
Where can I see a list of assigned ATO reporting categories?
When you view your list of pay items (Payroll menu > Pay items), you'll see which ATO reporting categories have been assigned on the Wages and salary, Superannuation and Deductions tabs.
This is a handy way to see if any ATO reporting categories are yet to be assigned.
