How to Setup Overtime Allowance Sub Types

Owned by Paul Hooker
Last updated: Jul 11, 2022 by Infinet Admin
2 min read

Overview

The STP V2 reporting requirements stipulate that an allowance that is paid for out of hours, that is not an Overtime Meal Allowance (MD) must be reported as overtime rather than an allowance. To ensure this is reported correctly you must update your overtime allowance pay component sub types using one of the following approaches:

  • Approach 1:

    • Change the Pay Component Category to Overtime Allowance

  • Approach 2:

    • Change the Pay Component Type from Allowance to Overtime, and update the Payment Summary Location to Gross Payment Box

For information on whether an allowance should be reported as overtime, or details on other allowance types please refer to the ATO guidance. The following examples only highlight the fields specific to each approach and you should set other fields to match your specific needs.

For both approaches, as the sub type is no longer considered an allowance for reporting purposes you must ensure the STP Type Code and STP Allowance Other Type fields fields are left blank.

Approach 1: Setting Up An Overtime Allowance Using the Category

Approach 2: Setting Up an Overtime Allowance Using the Type

 

Setting Up An Overtime Meal Allowance

There is one exception to overtime allowance reporting whereby a specific Allowance Code is provided by the ATO. In this scenario the sub type is reported as the Overtime Meal Allowance (MD) and is not reported as overtime.

FAQ

Q: I previously changed my sub type configuration from type Allowance to type Overtime, do I need to change this to use the pay component category Overtime Allowance instead?
A: No, both continue to work however please ensure the STP V2 allowance fields have been cleared.

Q: I have previously been reporting an overtime allowance incorrectly, do I need to do anything after I have updated the sub type configuration to correctly report as an overtime allowance ?
A: STP totals are reported as year to date amounts, so as long as the employees who have been paid the allowance is included in a subsequent STP Pay Event in the same tax year no further action is needed. If you are unsure send an update pay event for the employees.