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STP set up of ATO reporting Unused Annual Leave

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Contributing Cover User JackieBell
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STP set up of ATO reporting Unused Annual Leave

Hi,

 

I'm currently setting up the various reporting categories for the ATO to use STP.

For the Unused Annual Leave, the choice is between Lump Sum A Termination or Lump Sum A Redundancy.

In the past I've only had to use the Lump Sum A Termination category, however, you wouldn't know what category any future lump sums would be. Can I allocate Lump Sum A Termination now just to have something allocated (as I don't think I can start reporting via STP until I have all pays categorised) but then if I have a redundancy in the future can I change the allocation before processing the final payment?

Thank you,

 

Jackie

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MYOB Moderator Steven_M
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Re: STP set up of ATO reporting Unused Annual Leave

Hi @JackieBell 

 

An ATO Payroll Category is required for each payroll category in order to proceed to the next stage of the Payroll Reporting process. Ideally, you would set up each payroll category with the necessary ATO Reporting Category at the time, however, this is a perfect world.

 

If you do set a payroll category up with the incorrect ATO Reporting Category or you do need to change it for any reason, you are welcome to change that ATO reporting category. The key warning being that as AccountRight will report year-to-date values so by changing that category the next pay that you do will report any old values that may have been processed for the payroll year as the new ATO Reporting Category.

Kind regards,
Steven

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Experienced Cover User Rebecca12345
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Re: STP set up of ATO reporting Unused Annual Leave

Hi Jackie / anyone else reading this post


When you say "For the Unused Annual Leave, the choice is between Lump Sum A Termination or Lump Sum A Redundancy' - this could be misleading for someone reading it (hehe, it was for me), so I thought I'd clarify.

I also found the MYOB Accountright instructions [in Assign ATO reporting categoires for Single Touch Payroll reporting] misleading.  It says, in the table, that 'lump sum payments may include categories such as payment of annual leave on termination'.  But this does not mean that it always does.

 

The ATO website shows that sometimes the payout of unusued leave is considered part of salary/wages.  For example unused leave paid out due to voluntary resignation for leave accrued after 17/08/93 is to be included in salary/wages on the payment summary.  (And then as I understand it, should be part of Gross Payments for the ATO STP reporting. )

Refer the ATO's Schedule 7 - tax table for unused leave payments on termination.

 

 

Experienced Cover User ElkaS
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Re: STP set up of ATO reporting Unused Annual Leave

Hi Steve,

With regards to STP report on final payment of Unused Annual Leave on termination - When we lodged the final payment for a staff member back in Mar19 thru STP the "Lump Sum A Termination" ATO Category had been chosen, however reading the ATO website we should have allocated this Unused Annual Leave to "Gross Payments", because it was accrued after 18 Aug 1993 (see ATO extract below).

 

So, to correct this - how would I fix up the category to be Gross Payments for the Termination reporting to ATO?  I did change the category and terminated the employee through the Payroll Reporting option, but the unused annual leave was still allocated to Lump Sum A (as per the initial final pay), so I withdrew the termination.

Thanks, Elka

Complete the payment summary

When you are making a payment of unused annual leave and leave loading on termination of employment, the amount that accrued before 18 August 1993 is shown on the employee's payment summary at 'Lump Sum A’.

Any amounts of unused annual leave and leave loading that accrued on or after 18 August 1993 are included at 'Gross payments' along with any other amounts.

Experienced Cover User SMM
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Re: STP set up of ATO reporting Unused Annual Leave

Thanks for this, I agree. The MYOB notes for setup were vague in this area. ATO Schedule 7 explains the treatment.

S

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