GST return report includes PAYG-exempt allowance in W1
We pay our employees mileage per km at a rate above the ATO rate, so we use two pay items:
- "mileage under ATO Rate": the portion up to the ATO rate. It is exempt from PAYG withholding.
- "mileage over ATO Rate": only the excess above the ATO rate.
Both items are set up with the STP category "Allowance - cents per km".
The problem: the "under" item is exempt from PAYG withholding, so it should be excluded from W1. The IAS handles this correctly. However, the GST return report still includes this allowance in W1.
As a result, W1 on the GST return report is overstated and doesn't match the IAS, so we can't rely on that report.
How can we change this setting so the GST return report excludes the exempt allowance from W1? We would prefer not to change the STP category, as the payments are correctly reported to the ATO as cents per km allowances.
