Allowances are separately itemised
Previously, many allowances were included and reported as Taxable Gross. Now all allowances are separately itemised.
Process
There are 3 steps you should follow to work out how to report allowances in your STP report. You should identify:
- if the amount is a reportable allowance
- if the allowance needs to be disaggregated
- the purpose of the allowance.
Identify whether the amount is a reportable allowance
Generally, allowances are reportable through STP. There are some things which you may know as allowances which don't need to be reported through STP because:
- they are not allowances, or
- there are special rules about reporting them.
To work out whether you need to report allowances you've paid, consider the following questions:
- Are you paying an amount to your employee?
- STP is reporting about payments that you make. If you are not paying an amount, there's nothing to report through STP.
- However, if you are providing a fringe benefit, you may need to consider your fringe benefits tax (FBT) obligations and you may need to include reportable fringe benefits in your STP reporting.
- Is the amount you're paying your employee, reimbursing an expense that can be verified by receipts?
- There's a difference between allowances and reimbursements. Reimbursements typically compensate an employee exactly for an expense they have incurred on your behalf, and the recipient generally needs to verify that they did incur that expense.
- Reimbursements should not be reported through STP.
- Is the amount you're paying your employee a living away from home allowance fringe benefit?
- Living away from home allowance fringe benefits are not reportable as allowances through STP.
- Some industrial instruments may use the name 'living away from home allowance' to describe a payment that is a travel allowance, so it's important to understand which one you're paying.
- Is the amount you're paying your employee an overtime meal allowance or travel allowance which also exceeds the relevant ATO reasonable amount for the financial year?
- There are special rules for reporting overtime meal allowances or travel allowances. You don't need to report overtime meal allowance and travel allowance if it's up to and including the ATO reasonable amount. If the amount you pay exceeds the ATO reasonable amount, you must report the whole amount that you paid.