Salary Sacrificed Items in the STP Update Report

Overview

With the introduction of STP 2.0, the way that wages are reported to the ATO has changed. Wages must now be disaggregated within your STP data, and for salary sacrificed amounts this means showing the actual amount of salary and wages which was sacrificed. This could be one of two types: 

• Superannuation (type S) 
• Other benefits (type O)

When reviewing the STP Update Report in Astute, it's important to keep the above in mind, as the amounts on-screen may not be what you expect. Below you'll find some examples from the ATO that we've set up in Astute so you can see what the STP Update Report will look like when amounts have been salary sacrificed. 

Before you Start

The first thing to check is whether your salary sacrifice item has been configured correctly. For super salary sacrifice, please check you have correctly set up a pre-tax deduction in Config > Payroll > Deductions. There are a few settings to check for salary sacrificed deductions. 

Disclaimer: The below examples highlight the fields required for salary sacrifice reporting for STP Phase 2. Please note there are other fields on these pages that have not been completed for these examples. Please ensure you fully configure your items based on your business requirements.  

For other salary sacrifice amounts, these are also set up in Config > Payroll > Deductions. 

Example 1: Super Salary Sacrifice

In this example, Adam's gross annual earnings are $60,000 and he's sacrificed $3,000 into his superannuation. 

• For STP Phase 1 Reporting, you would have reported $57,000 taxable wages (that is, the post-sacrificed amount)
• For STP Phase 2 Reporting, you need to report the pre-sacrificed income as well as the amount of salary sacrifice, which will be: 
  • Gross: $60,000
  • Salary Sacrifice (type S): $3,000

To the ATO, this shows Adam's gross is $60,000 and he sacrificed $3,000 to super, which leaves $57,000 as taxable wages. 

How it appears in the STP Update in Astute

If the above amounts were processed in Astute, the STP Update Report will show the following: 

Note that the 'Gross' amount appears overstated, but this is actually correct. 

To view the full breakdown, click on the blue 'Message' icon. You will then see this: 

How it appears in the Pay Item Balance Report 

Using the same example, let's look at how these values will be displayed in the Pay Item Balance Report. This is one of the recommended reports for EOFY reconciliations, as it allows you to filter on the 'STP Reporting Setting'. 

You'll find this report in Reports > Payroll > Pay Item Balance. In the Report Settings, we suggest summarising by Pay Item and STP Reporting Settings. 

Looking at the 'STP Reporting Settings' column, note that the $3,000 salary sacrificed amount is showing twice. One line represents the sacrificed amount, the other represents the reportable superannuation amount. The 'Gross Payments' remain at $60,000 as this is the pre-sacrificed income. These are the same values and categories seen above in the STP Update Message. 

While it appears overstated, the $5,000 amount in the 'Salary Sacrifice' category will be deducted from the Gross Payments, leaving a taxable income of $57,000 in the employee's Income Statement. 

Example 2: Other Salary Sacrifice

In this example, Anita's gross annual earnings are $100,000 and she's sacrificed $5,000 into her superannuation and $20,000 to a novated lease. 

• For STP Phase 1 Reporting, you would have reported $75,000 taxable wages (the post-sacrificed amount)
• For STP Phase 2 Reporting, you need to report the pre-sacrificed income as well as the amount of salary sacrifice, which will be: 
  • Gross: $100,000
  • Salary Sacrifice (type S): $5,000
  • Salary Sacrifice (type O): $20,000

To the ATO, this shows Adam's gross is $100,000 and he sacrificed $5,000 to super and $20,000 to 'other', which leaves $75,000 as taxable wages. 

How it appears in the STP Update in Astute

If the above amounts were processed in Astute, the STP Update Report will show the following: 

In the 'Message' we see the full breakdown:

How it appears in the Pay Item Balance Report 

Looking at the 'STP Reporting Settings' column, note that the $5,000 salary sacrificed super and $20,000 other salary sacrificed amounts are showing twice. The 'Gross Payments' remain at $100,000 as this is the pre-sacrificed income. These are the same values and categories seen above in the STP Update Message. 

While it appears overstated, the $5,000 and $20,000 amounts in the 'Salary Sacrifice' categories will be deducted from the Gross Payments, leaving a taxable income of $75,000 in the employee's Income Statement.