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Confirmation Of Allowances And Deductions Settings 

This section of the end of year preparation will be focused on allowances. 

In Wagemaster, allowances refer to functionality handling both additions and deductions to an employee’s pay. The latter is sometimes referred to as deduction allowances. Allowances are also used for paying employee's wage by some users who pay employees on a per unit basis i.e. Shearers, Crutcher's, etc.

For STP reporting, the ATO requires allowances that are reported separately to the employee's individual non-business gross amount, to be categorised according to a pre-defined list of ATO Types. These are the allowances that, prior to STP reporting, would have been itemised separately on employee INB (individual non-business) payment summaries, e.g., Meal Allowances, Car Allowances.

These separated allowances are excluded from the gross total on the ATO Payment Summary Report and are listed separately for claiming individually by employees when lodging their tax return. It is therefore very important to only show qualifying allowances separately via STP reporting and on the optional ATO payment summary and not all allowances paid to employees. Any other allowances that were setup and ticked as a Taxable Allowance will automatically have the (paid or deducted) value, incorporated into the taxable gross figure throughout the financial year.

The same functionality can be applied to deduction allowances for Workplace Giving.

Any other allowances that were setup and ticked as a Taxable Allowance, will automatically have the value paid or deducted and will be incorporated into the taxable gross figure of employees who have been paid this allowance throughout the financial year (unless you select them to list separately on the ATO payment summary). 

Please consult your accountant for advice on which allowances may need to be separated for ATO reporting in the allowances area. 

Please Note

This financial year-end you will have to be aware of how your Wagemaster allowance configuration must meet the needs of traditional ATO payment summaries but also changes associated with STP reporting in the new financial year. 

Settings For ATO Payment Summaries 

You can locate allowances by:

  1. Navigate to Setup > Allowances.
    2.png
  2. The resulting window offers an overview of your allowance configuration for STP reporting.
    Select and edit an allowance then choose the ATO Payment Summary tab. At the base are fields
    associated with STP. They are the Report in STP tick box and the associated ATO Type field.Screenshot_2021-06-09_153145.png
  3. Select the allowance and click on Edit > ATO Payment Summary.
    • These setting will still be in place from last year so your focus will be on any new allowances created since last year, or perhaps any missed for attention at that time. blobid0.png
    • If you are planning to produce ATO payment summaries this year, you will still need to configure
      the original fields at the top of the window so that they offer consistent reporting.
      The example shown above, therefore, complies both with the old standard and the new STP
      reporting standard.Screenshot_2021-06-09_153252.png

Settings For STP Reporting In The New Financial Year 

  1. For STP reporting, the ATO requires allowances that are reported separately to the employee's individual non-business gross amount, to be categorised according to a pre-defined list of ATO Types.
    blobid1.png
  2. You will find fields at the base of the Allowances window associated with STP.
  3. They are the Report in the STP tick box and the associated ATO Type field. The same functionality can be applied to deduction allowances for workplace giving.
  4. If you are planning to produce ATO payment summaries this year, you will still need to configure the original fields at the top of the window so that they offer consistent reporting.
    • The example shown above, therefore, complies both with the old payment summary standard and the new STP reporting standard.
      A report explored in the article here relies on configuration within the employee record to properly display allowances on payment summaries and so via the ATO Payment Summaries Report.
  5. Navigate to an employee file and click on Payments > Allowance.12.PNG
  6. Ensure that each qualifying allowance is marked to be included in ATO payment summaries and so on in the ATO Payment Summaries Report.13.PNG
  7. This option will not be ticked for employees paid on a per-unit basis, i.e. Shearers, Crutcher's etc. 3.png
  8. Consult your company accountant for advice on which allowances may need to be separated in STP reporting and on the ATO payment summary in the allowances area.

You can also see how to see allowances/FBT on STP Screen: Allowances/FBT In STP.

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