STP Phase 2 introduces a greater level of granularity around reporting of payments. Paid leave is a particular area where there are complex rules around how a payment must be categorised for the purpose of reporting to the ATO.
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What are the requirements for reporting paid leave under STP Phase 2?
Under STP Phase 2 reporting requirements, payments made to Individual Non Business payees for leave taken, leave paid leave is required to be reported under out during employment and leave paid out at termination of employment must be reported as year-to-date amounts that are disaggregated from other gross payments. The disaggregated amounts are reported under one of the following categories depending on the type of leave being that is paid and whether the leave is paid when taken, cashed out during service or paid out on termination of employmentthe circumstances under which the payment is made:
Paid leave type P - applies to paid parental leave including Government Paid Parental Leave (GPPL) payments from Services Australia that are paid to the payee through payroll. Also applies to parental leave that is paid directly by the employer.
Paid leave type W - applies to Workers' compensation leave.
Paid leave type A - applies to ancillary leave such as leave taken for Australian Defense Force service, jury service, eligible community service, emergency service.
Paid leave type O - applies to all other leave types covered by the ruling SGR 2009/2 S32, 33, such as annual leave/annual leave loading, personal leave, rostered day off (RDO) leave, time off in lieu (TOIL), compassionate/bereavement leave, study leave and paid leave grated granted by an employer in response to specific circumstances.
Paid leave type C - applies to certain the following leave types when cashed out during servicepaid out during employment:
annual leave
annual leave loading (except where the applicable award/pay agreement stipulates that the leave loading is paid in compensation for loss of ability to work overtime)
personal/carers' leave
rostered day off (RDO)
long service leave.
Paid leave type U - applies to certain the following types of leave when paid out as a gross payment at termination of employment:
annual leave
annual leave loading
long service leave.
Overtime - applies to the following types of leave when cashed paid out during service:
annual leave loading (only where the applicable award/pay agreement stipulates that the leave loading is paid in compensation for loss of ability to work overtime)
time off in lieu (TOIL).
In addition to the above, some leave types must be reported as a Lump Sum A, Lump Sum B or as part of an employment termination (ETP) payment when leave is paid out on termination of employment.
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At termination of employment, annual leave and annual leave loading … |
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The reporting of leave payments by type applies to payees with a payee type/income type of Individual Non Business. For payees with a payee type/income type of Labour Hire, leave payments are reported as part of the payees' overall gross earnings amount rather than separately by type. |
How does FastTrack360 recognise the type of leave being paid?
When leave taken is paid automatically at the Leave Payments pay batch stage
The Paid Leave Type field in the header of the Leave > Maintenance > Leave Type > Edit Leave Type screen, which is highlighted in the example below, defines how a leave payment, which is linked to the leave type, will be classified in STP reporting when leave taken is paid automatically in a pay batch.
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For example, …
an approved leave request linked to the leave type
an absence item, linked to the leave type, on an approved timesheet.
Leave type maintenance in the FastTrack360 Leave module will be enhanced so that any leave type that is assigned to the country of Australia will feature the ability to select, in the header of the leave type record, the paid leave type (P, W, A or O) to which that leave type record corresponds.
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