STP Update - Allowance setting on HeroPay

The first update for HeroPay in term of STP is now released. It is in relation to the configuration of allowance based pay categories.

As these changes are STP specific, you do NOT have to update any pay category settings until before you process the first pay run in the new financial year. We would recommend however updating the settings now as part of your EOFY review of pay category settings. We can confirm that if you do apply the updates now, payment summaries for this financial year will not be affeced.  

HeroPay will also update allowance based pay categories contained in any of our Modern Awards as part of the 1 July review. This means that users will not be required to update any of the Award allowances. Refer to here for more details about award updates on HeroPay. 

If you are paying allowances outside available Modern Awards on HeroPay, refer to below instruction. 

 

ALLOWANCE SETTING UNDER STP REQUIREMENTS

Under Single Touch Payroll (STP), specific types of allowances are to be separately itemised on the Income Statement, similar to what currently occurs with payment summaries. The difference with STP however, is that the separately itemised allowances are to be grouped and reported by category. 

The rules for categorising allowances are aligned with the ATO's Withholding for allowances tables that can be accessed here.

To edit any pay category settings go to Payroll Platform/ Payroll Settings > Pay Categories. Click on the pay category name and then click on the "Payment Summary Classification" dropdown list. You will notice the additional allowance classifications added to this list:

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Existing allowance based pay categories whose payment summary classification was set as "Allowance" is now defaulted to "Allowance (Other)".

How to classify allowances

Using the ATO's methodology, each allowance category relates to one of the six Withholding for allowances table. We have provided an explanation of each allowance below: 

 

Allowance (Other)

Where an allowance is defined in the below table (Table 1) to be reported as separately itemised allowances, they are to be classified as "Allowance (Other)".

 

Allowance (Car)

Any allowance meeting the definition in the below table (Table 2) is to be classified as "Allowance (Car)".

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Allowance (Laundry)

Any allowance meeting the definition in the below table (Table 4) is to be classified as "Allowance (Laundry)".

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Allowance (Meals)

Any allowance meeting the definition in the below table (Table 5) that would otherwise be itemised in the payment summary, is to be classified as "Allowance (Meals)". 

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Allowance (Transport)

Any allowance meeting the definition in the below table (Table 3) that would otherwise be itemised in the payment summary, is to be classified as "Allowance (Transport)".  

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Allowance (Travel)

Any allowance meeting the definition in the below table (Table 6) that would otherwise be itemised in the payment summary, is to be classified as "Allowance (Transport)".  

Examples here include domestic or overseas travel allowance above the reasonable limit and all overseas accommodation allowances.

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If you are unsure of what your allowances should be classified as, please consult with the ATO, your payroll advisor, bookkeeper or accountant. 

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