Learn about Pay Items

Use this Payment Type:

When you pay employee:

Ordinary Earnings

Payment for ordinary hours of work, including shift loadings. Also, include allowances, bonuses and commissions paid as part of their regular work hours.

Bonuses & Commissions

Bonuses in recognition of performance or services and may not be related to a particular period of work performed.

Commissions in recognition of performance or services and may be calculated as a portion of the proceeds or volume of sales.

If bonuses or commissions are paid in respect of overtime, they are to be reported as payment type - Overtime.

Directors Fees

Directors’ fees, including payment to cover travelling costs, costs associated with attending meetings and other expenses incurred in the position of a company director.

The full amount of the payment must be reported, specifically the full pre-sacrifice value of the fees, before any Salary Sacrifice may be deducted from the amount.

Labour Hire

Payments by a business that arranges for persons to perform work or services, or performances, directly for clients of the entity. Income for contractors only, does not include employees.

Overtime

Payments for work performed during hours outside an employee’s ordinary hours of work.

Voluntary Agreement

A written agreement between the payer and a contractor payee to bring work payments into the PAYGW system. The payer does not have to withhold amounts for payments they make to contractors. However, the payer and a contract worker (payee) can enter into a voluntary agreement to withhold an amount of tax from each payment they make to the contractor.

Exempt Foreign Income

When an Australian resident for tax purposes works in another country for 91 days or more for a continuous period and the income is subject to tax in that country, the foreign income may be exempt from Australian tax.

Other Specified Income

Specified payments by regulation 27 of the Taxation Administration Regulations 2017. Income from tutorial services provided for the Aboriginal Tutorial Assistance Scheme of the Department of Education, Skills and Employment; from translation and interpretation services for the Translating and Interpreting Service of the Department of Home Affairs; as a performing artist in a promotional activity.

Use this Payment Type:

When you pay employee:

Annual Leave

Paid leave for absences includes, but is not limited to annual leave, leave loading, long service leave, RDOs.

Defence & Ancillary Leave

Paid leave for absences such as for Australian Defence Force, Emergency Leave, eligible Community Service and Jury Service. Services Australia categorise this type of payment as Employment Income or Lump Sum, depending on the payment frequency. Additionally, this type of payment has significant government policy impact.

Leave Cashout

Represents the ordinary time earnings leave entitlements that have been paid out in lieu of the payee taking the absence from work. This option represents Fair Work entitlements as defined in an award, enterprise agreement or contract of employment (for award and agreement free employees). When leave is cashed out, it reduces the balance of the entitlement, as occurs if the absence was taken, but on the date of payment rather than over the duration of the absence.

Parental Leave

After at least 12 months of service, employees can get parental leave, paid or unpaid, when an employee gives birth, an employee’s spouse or de facto partner gives birth or an employee adopts a child under 16 years of age. Some employers offer paid parental leave and the Government Paid Parental Leave (GPPL) Scheme offers eligible employees, who are the primary carer of a newborn or adopted child, up to 18 weeks’ leave, paid at the national minimum wage. Generally, GPPL is paid by Services Australia to the employer to pay the employee, but both types of paid parental leave may be paid at the same time. These amounts are not OTE according to SGR 2009/2.

Personal Leave

Sick leave, carer’s leave etc

Unpaid Leave

Leave without pay

Unused Leave on Term

Some types of leave balances are paid out upon the termination of employment, in accordance with the industrial instruments that define the entitlement to leave. Unused leave on termination is comprised of the post-17 August 1993 component of annual leave, leave loading and long service leave for termination reasons other than genuine redundancy, invalidity or early retirement scheme.

Workers Compensation

Any workers’ compensation payments received by an injured employee for the hours not worked (or not attending work as required) or if the employment has been terminated. These are amounts that are not OTE according to SGR 2009/2.

Unused Leave on Term

Leave balances paid out on termination of employment.

Use this Payment Type:

When you pay employee:

Car expense (Cents per km)

A deductible expense allowance that define a set rate for each kilometre travelled for business purposes that represents the vehicle running costs, including registration, fuel, servicing, insurance and depreciation into account.

This should not include any cents per kilometre allowances that are paid for travel between the payees home and place of work unless it is a home-based business and the trip was for business purposes.

Mileage paid for private purposes is a non-deductible expense for PAYGW and super guarantee purposes and are to be reported as Other Allowance Type with a Description: ND Non-deductible.

Mileage paid for other vehicles is a deductible expense that is to be treated as “no measures defined by the ATO” for PAYGW and super guarantee purposes and is to be reported as Other Allowances Type and Description: Private Vehicle

Tools

A deductible expense allowance to compensate a payee who is required to provide their own tools or equipment to perform work or services for the payer. For example: chef’s knives, divers’ tanks, trade tools, phone allowances. This allowance was formerly required to be reported under “Other Allowances” with a description of the allowance type. This is now required to be reported separately.

Transport Award

A deductible expense allowance for the total rate specified in an industrial instrument to cover the cost of transport (excluding travel or cents per kilometre reported as other separately itemised allowances) for business purposes.

Travel

Domestic or Overseas Travel Allowances and Overseas Accommodation Allowances, a deductible expense allowances that are in excess of the ATO reasonable allowances amount (for domestic or overseas travel), undertaken for business purposes, which are intended to compensate employees who are required to sleep away from home.

It is not a reimbursement of actual expenses, but a reasonable estimate to cover costs including meals, accommodation and incidental expenses.

Meals

A deductible expense allowances defined in an industrial instrument that are in excess of the ATO reasonable amount, paid to compensate the payee for meals consumed during meal breaks connected with overtime worked.

Laundry

A deductible expense allowances for washing, drying and/or ironing uniforms required for business purposes. These allowances are typically paid as a regular rate for each week of work or services performed and cannot include dry cleaning expenses or reimbursements.

Uniforms refers to the approved categories of clothing defined by the ATO.

Tasks

A service allowances that are paid to an employee to compensate for specific tasks or activities performed that involve additional responsibilities, inconvenience or efforts above the base rate of pay.

For example; higher duties allowance, confined spaces allowance, dirty work, height money, first aid etc.

Qualifications

A deductible expense allowances that are paid for maintaining a qualification that is evidenced by a certificate, licence or similar. For example, allowances to cover registration fees, insurance, licence fees etc that are expected to be expended to maintain a requirement of the job.

Allowance

Any expense allowances that are not listed as a separate Payment Type.

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When you pay employee:

Deceased Estate

A death benefit payment directly to a trustee of the deceased estate. This person may be an executor or administrator who has been granted probate or letters of administration by a court.

Dependant

A death benefit payment directly to a dependant of the deceased employee. A dependant may include a spouse of the deceased, a minor child, a person who had an interdependency relationship with the deceased or a person who was a dependant of the deceased just before the latter died.

ETP (N)

A multiple payment for a death benefit ETP type “N” for the same deceased person, where the later payment is paid in a subsequent financial year from the original type “N” payment. The ETP cap is reduced by the prior financial year payment prevent splitting payments to avoid the ETP cap.

ETP (O)

A life benefit payment as a consequence of employment, paid for reasons other than for “R” below. Such as a gratuity or golden handshake, non-genuine redundancy payments, payments in lieu of notice, unused rostered days off (RDOs) or unused personal leave. This is the non-excluded part of the ETP.

ETP (R)

A life benefit payment as a consequence of employment, paid only for reasons of genuine redundancy (the employer decides the job no longer exists), invalidity (the employee sustained a permanent disability), early retirement scheme (an ATO-approved plan that offers employees incentives to retire early or resign when the employer is rationalising or reorganising their business operations) or compensation for personal injury, unfair dismissal, harassment or discrimination. This is the excluded part of the ETP.

Non-Dependent

A death benefit payment directly to a non-dependant of the deceased employee. A non-dependant is a person who is not a dependant of the deceased and not a trustee of the deceased estate.

Other Reason

A life benefit payment as a consequence of employment, paid for reasons other than for “R” above. Such as a gratuity or golden handshake, non-genuine redundancy payments, payments in lieu of notice, unused rostered days off (RDOs) or unused personal leave. This is the non-excluded part of the ETP.

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When you pay employee:

Lump Sum Amount A (R)

All unused annual leave or annual leave loading, and that component of long service leave that accrued from 16/08/1978, that is paid out on termination only for genuine redundancy, invalidity or early retirement scheme reasons. Services Australia categorise these payments as Term.

Lump Sum Amount A (T)

Unused annual leave or annual leave loading that accrued before 17/08/1993, and long service leave accrued between 16/08/1978 and 17/08/1993, that is paid out on termination for normal termination (other than for a genuine redundancy, invalidity or early retirement scheme reason). Services Australia categorise these payments as Term.

Lump Sum Amount B

Long service leave that accrued prior to 16/08/1978 that is paid out on termination, no matter the cessation reason. Only 5% of this reported amount is subject to withholding. Services Australia categorise these payments as Term.

Lump Sum Amount D

Represents the tax-free amount of only a genuine redundancy payment or early retirement scheme payment, up to the limit, based on the payees years of service.

Lump Sum Amount E

Represents the amount for back payment of remuneration that accrued, or was payable, more than 12 months before the date of payment and is greater than the lump sum E threshold amount ($1,200). Services Australia categorise these payments as Lump Sum.

Return to work

A return to work amount is paid to induce a person to resume work, for example; to end industrial action or to leave another employer. It does not matter how the payments are described or paid, or by whom they are paid.

Redundancy

A genuine redundancy payment that is taxable (above the taxfree threshold). A genuine redundancy payment is a payment made to the employee if their job is abolished and they no longer have a job. This means you as their employer has made a decision that the employee’s job no longer exists, and their employment is to be terminated.

Redundancy Tax free

The tax free portion of the genuine redundancy payment.

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When you pay employee:

Salary Sacrifice Other

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.

Salary Sacrifice Super

An effective Salary Sacrifice arrangement, entered into before the work is performed, where contributions are paid to a complying fund, where the sacrificed salary is permanently foregone.

Reportable Employer Super (RESC)

The optional (not legislated or mandated by industrial, legislative or business policy instruments) employer super contributions made on behalf of the employee, that have been influenced by the employee, such as for an effective Salary Sacrifice arrangement for super contributions to a complying super fund, amounts in excess of the maximum contribution base and other super co-contributions.

Matching contributions under individual contracts are RESC because the employee was able to directly influence the terms of the agreement.

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When you pay employee:

RFBA Exempt

The grossed-up taxable amount of certain fringe benefits provided to a payee where:

• The total of taxable and exempt benefits provided is in excess of $2,000 in the FBT year (1 April to 31 March), and

• The benefit was provided to an employee performing exempt duties for an employer that is eligible for an exemption from FBT under section 57A of the FBTAA.

The reporting of RFBA is voluntary under STP, though if not reported through STP, must be reported via Payment Summaries/PSAR. Where not able to be reported throughout the financial year, a payer can report this amount once as a part of the finalisation process for the payee.

RFBA Taxable

The grossed-up taxable amount of certain fringe benefits provided to a payee where:

• The total of taxable and exempt benefits provided is in excess of $2,000 in the year (1 April to 31 March), and

• either

O The employer is not eligible for an exemption from FBT under section 57A of the Fringe Benefits Tax Assessment Act 1986 (FBTAA), or

O The employer is eligible for an exemption from FBT under section 57A of the FBTAA but the benefits were provided to an employee performing non-exempt duties.

Use this Payment Type:

For the below type of deductions:

Child Support Deduction

Deduction made under notice as per section 45 of the Child Support (Registration and Collection) Act 1988. This is a fixed dollar amount each pay period. Deductions made under section 45 of the Child Support (Registration and Collection) Act 1988 are made subject to a Protected Earnings Amount (PEA).

Child Support Garnishee

Deduction made under notice as per section 72A of the Child Support (Registration and Collection) Act 1988. This is a percentage of a employees taxable gross income, a lump sum or a fixed amount each pay until the debt is satisfied.

Fees

Fees, including union fees, subscriptions to trade, business or professional associations, the payment of a bargaining agent’s fee to a union for negotiations in relation to a new enterprise agreement award.

Other Deduction

Any other deductions that are not listed above.

Reportable Employer Super (RESC)

Additional, optional (not legislated or mandated by industrial, legislative or business policy instruments) employer super contributions made on behalf of the employee, that have been influenced by the employee, such as for an effective Salary Sacrifice arrangement for super contributions to a complying super fund, amounts in excess of the maximum contribution base and other super co-contributions.

Matching contributions under individual contracts are RESC because the employee was able to directly influence the terms of the agreement.

Workplace Giving

Workplace giving program donations to charities or organisations that are entitled to receive tax deductible donations.

Foreign Tax Paid

When an Australian resident for tax purposes works in another country for the qualifying period where that income is taxable, then the amount of foreign tax paid or payable by the payer to that foreign government or authority must be reported in Australian dollars to the ATO in the same financial year as the foreign employment income is reported. This is required, even if the tax isn’t actually paid to the foreign government or authority until after the end of the Australian financial year.