Unused Annual Leave payment not appearing in W1

[MV-8]

Hi There,

I'm just preparing to lodge the monthly activity statement and noticed that the total wages in Payroll activity summary is different than the amount appeared in W1. The difference is the unused annual leave payment to staff who resigned and that portion is not appearing in W1. The ATO reporting category for unused holiday pay has been set up as 'Gross Payment' which then should be included in W1.

For Example.

Total Wages in Payroll activity summary: $25,000

Amount showing in W1 for activity statement lodgement: $24,000 

The 1,000 difference is the unused annual leave payment upon resignation

Do I simply edit the amount in W1 to 25,000? or is there any other steps that I need to do?

Thank you in advance.

[kazda]

Maybe this will help - are you reporting payroll to ATO using STP Phase 2 ?     

If you are....

ATO advise on their website,   When an employee transfers or leaves | Australian Taxation Office (ato.gov.au)

Unused leave on termination (paid leave type U)

Unused leave paid on termination that was previously reported in Gross in your STP Phase 1 report must now be reported as unused leave on termination (paid leave type U) in your STP Phase 2 report.

[MV-8]

Hi Kazda, Thank you for the reply. I am still on STP phase 1 which I think should be still under gross payment.

What do you think I should do in this scenario?

Thank you in advance.

[kazda]

I

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@MV-8 wrote:

Hi Kazda, Thank you for the reply. I am still on STP phase 1 which I think should be still under gross payment.

What do you think I should do in this scenario?

Thank you in advance.

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Hi
It would be best to refer to ATO guidelines for STP1.   

[MV-8]

Thank you. The ATO guideline for STP 1 is that the annual leave upon resignation should be under gross wages.

If anyone can comment on my initial question would be greatly appreciated. 

Thank you. 

[Tracey_H · Accepted solution]

Hi @MV-8 

Great to see that @kazda has offered assistance with this. Just to clarify, the ATO reporting categories determine how payments are reported to the ATO through STP only.

The W1 BAS field is populated according to the wage categories selected in the Activity statement fields:

Open your online BAS>>click on Settings>>Set up activity statement fields and select the Unused leave payroll category in the W1 field>>click Done. Open the current activity statement and click on Update from ledger to refresh the populated values.

Please let me know if you need further help.

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

[MV-8]

Thank you Tracey! That suggestion works.

Really appreciate your help. 

Regards.