Salary sacrifice reporting and activity statements

Salary sacrifice

Most employers have now transitioned to Single Touch Payroll (STP) Phase 2. In this transition, there’s been a change in reporting employee year to date amounts.

In Single Touch Payroll Phase 1, you reported post-sacrificed amounts to the ATO. Single Touch Payroll Phase 2 requires you to report pre-sacrificed amounts and separately report the salary sacrificed amounts:

• type S for amount sacrificed to super
• type O for amounts sacrificed towards other benefits.

Activity statements

There’s been no change to activity statement requirements – you still need to report post-sacrificed amounts at W1, and you shouldn’t include pre-sacrificed amounts at this label.

Note, the ATO will pre-fill your activity statements for labels W1 and W2 in ATO online services using the employer level totals you reported to the ATO through STP.

Different payroll solutions have different ways of setting up and displaying salary sacrificing amounts, so refer to your product’s guidance.

Need help?

For help to fix mistakes visit correcting information reported through STP.

Accurate STP reporting is important to ensure:

• the right information is displayed in employees’ income statements
• the ATO can pre-fill employees’ individual income tax returns with the right information
• other government agencies have the right information when interacting with you or your employees.

The ATO offer a range of resources to help employers get their STP2 reporting right. These include:

• Common STP Phase 2 reporting questions and mistakes
• Salary sacrifice
• ATO PAYG withholding pre-fill for activity statements
• PAYG withholding – how to complete your activity statement labels
• STP – Reporting Help – RESC & Salary Sacrificing video

Source: ATO Newsroom