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How to assign ATO categories for deduction?
How to assign ATO categories for deduction?

Assign appropriate deduction categories

Kavya avatar
Written by Kavya
Updated over 2 years ago

Step 1 - Click on "Settings" > "Payroll" > "Deductions"

Step 2 - Click on "Add New"

Step 3 - Add the deduction name and select the deduction category

Step 4 - Click on "Save"

Below is the video for your reference:

A list of the pre-defined deduction classification options is as follows:

  • Child support deduction: This is a deduction made under notice as per section 45 of the Child Support (Registration and Collection) Act 1988. Select this deduction type only if you are reporting via STP and want an employee's child support deduction amount to be reported via STP every pay run, in lieu of providing a separate declaration to the Child Support Registrar. To be clear, if you are reporting via STP but prefer to manually send monthly reports to the Child Support Registrar then do not assign this deduction type. Additionally, take note that these deduction amounts will only begin being reported through STP upon the commencement of STP Phase 2 reporting.
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  • Child support garnishee: This is a deduction made under notice as per section 72A of the Child Support (Registration and Collection) Act 1988. Select this deduction type only if you are reporting via STP and want an employee's child support garnishee amount to be reported via STP every pay run, in lieu of providing a separate declaration to the Child Support Registrar. To be clear, if you are reporting via STP but prefer to manually send monthly reports to the Child Support Registrar then do not assign this deduction type. Additionally, take note that these deduction amounts will only begin being reported through STP upon the commencement of STP Phase 2 reporting.
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  • Salary sacrifice (others): This refers to an effective salary sacrifice arrangement, entered into before the work is performed, for benefits other than for superannuation, where the sacrificed salary is permanently foregone. Examples include a novated lease, gym membership, workplace giving donations, car, property (goods, land, buildings, shares and bonds), expense payments (loans, school fees, childcare costs and home phone costs) and work-related items such as portable electronic devices and equipment.
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  • Fees: Any amounts paid as union fees, subscriptions to trade, business or professional associations, bargaining agent's fees to a union for negotiations in relation to a new enterprise agreement/award on behalf of your employees.
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  • Workplace giving: Any workplace giving program donation amounts paid to charities or organisations that are entitled to receive tax-deductible donations. This classification only pertains to post-tax deductions. Refer to the ATO website for further information on how workplace giving donations should be deducted from an employee's pay.

If you have any feedback or questions, please email us at support@payroo.com.au

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