Description
A change has been made to the way in which gross earnings are reported in Single Touch Payroll (STP) for payees with an income type/payee type of Labour Hire (LAB) where deductions have been taken from gross earnings.
Previously, if a LAB payee had gross deductions taken from their gross earnings, the year-to-date (YTD) gross earnings amount that was reported in STP for the payee was gross earnings amount after gross deductions. However, under STP reporting rules, the YTD gross earnings that are reported must be the pre-salary sacrifice amount. Because of this, when YTD gross earnings are reported for a LAB payee in STP, the amount will now be the pre-salary sacrifice amount and not the amount after gross deductions.
While FastTrack360 does not prevent gross deductions from being applied based on the payee type, only payees with an income type/payee type of Individual Non Business (INB) can salary sacrifice their earnings. Therefore, it is recommended that gross deductions are only applied to INB payees. In STP reporting, YTD salary sacrifice amounts are reported as separately itemised amounts for INB payees.
Earnings paid to LAB payees are considered business/personal services income and such income cannot be salary sacrificed. Because of that, there is no way to report salary sacrifice amounts in STP for LAB payees.
Benefits
This enhancement provides compliance with ATO requirements for reporting of gross payments to payees, whereby the reported YTD gross amount must be the pre-salary sacrifice amount.
Configuration
No configuration required.