Deductions are used on pay lines when processing a pay run, in addition to the required Pay Rates and Allowances. We have provided the most commonly required Deductions as System Defaults (Templates) that can be used "as is" or copied and modified to suit your requirements. Deductions are separated into an individual category for ease of use and contain deductions that decrease the Payees Gross Pay (before PAYGW is calculated) OR Net Pay (after PAYGW is calculated).
🎯 If you are unsure if these Deductions apply to your circumstances, please refer to the Payee's Employment Contract or obtain advice from the Australian Taxation Office or Fair Work Ombudsman.
Single Touch Payroll Phase 2 has resulted in changes to Deduction reporting. Previously, only salary sacrifices for superannuation were itemised separately. There are eleven deduictions in the Deductions category.
After Tax Deduction applies when the Payee requests that you deduct an amount from their Net Pay.
The reporting of After Tax Deduction has not changed per the Australian Taxation Office Single Touch Payroll Phase 1 guidance. After Tax Deduction continues to be non-reportable.
Payments with this Deduction use the $ (or % of Rate Per Hour) set within the Deduction. These payments are not considered W1 (Total of Salary, Wages & other payments), Taxable or OTE (SGAA)
After Tax Superannuation Contribution applies when the Payee requests to forego part (either percentage or dollar value) or all of their net pay, which the Payer contributes to their Superannuation Fund at the end of the reporting period.
The reporting of After Tax Superannuation Contribution has not changed per the Australian Taxation Office Single Touch Payroll Phase 1 guidance. After Tax Superannuation Contribution continues to be non-reportable.
Payments with this Deduction use the $ (or % of Rate Per Hour) set within the Deduction. These payments are not considered W1 (Total of Salary, Wages & other payments), Taxable or OTE (SGAA).
Child Support Deduction applies wthen the Payee is subject to a notice per section 45 of the Child Support (Registration and Collection) Act 1988. The deduction amount is typically a fixed amount Per Pay Period Deduction and is subject to a Protected Earnings Amount (PEA). You can learn more about Child Support by visiting Services Australia.
The reporting of payments for Child Support Deduction is now disaggregated per the Australian Taxation Office Single Touch Payroll Phase 2 guidance. Rather than being excluded from STP Lodgements, Child Support Deduction is reported separately under Deduction Type D (PAYEVNTEMP227).
Payments with this Deduction use the $ (or % of Rate Per Hour) set within the Deduction. These payments are not considered W1 (Total of Salary, Wages & other payments), Taxable or OTE (SGAA).
Child Support Garnishee applies when the Payee is subject to a notice per section 72A of the Child Support (Registration and Collection) Act 1988. The deduction amount can be either a percentage of the Payee's Taxable Gross Income (before Salary Sacrifice is deducted), a Lump Sum amount or a Per Pay Period Deduction until the debt is resolved. You can learn more about Child Support by visiting Services Australia.
The reporting of payments for Child Support Deduction is now disaggregated per the Australian Taxation Office Single Touch Payroll Phase 2 guidance. Rather than being excluded from STP Lodgements, Child Support Deduction is reported separately under Deduction Type D (PAYEVNTEMP227).
Payments with this Deduction use the $ (or % of Rate Per Hour) set within the Deduction. These payments are not considered W1 (Total of Salary, Wages & other payments), Taxable or OTE (SGAA).
Salary Sacrifice (to Super Fund, OTE) applies when you have established an effective salary sacrifice arrangement and the Payee requests to forego part (either percentage or dollar value) or all of their salary or wages which the Payer contributes into their Superannuation Fund at the end of the reporting period. You can visit the ATO's Website to learn more about Salary Sacrifice to Superannuation and the requirements for an effective salary sacrifice arrangement.
The reporting of payments for Salary Sacrifice (to Super Fund, OTE) is now disaggregated per the Australian Taxation Office Single Touch Payroll Phase 2 guidance. Rather than being deducted from Gross, Salary Sacrifice (to Super Fund, OTE) is reported separately under Salary Sacrifice Type S (PAYEVNTEMP265).
Payments with this Deduction use the $ (or % of Rate Per Hour) set within the Deduction. These payments are considered W1 (Total of Salary, Wages, and other payments), OTE (SGAA) and reduce the Gross (PAYGW) amount.
Salary Sacrifice (to other benefit, OTE) applies when you have established an effective salary sacrifice arrangement and the Payee requests to forego part (either percentage or dollar value) or all of their salary or wages for other approved items such as a novated lease (Fringe Benefit) or a portable electronic device (Exempt Benefit). You can visit the ATO's Website to learn more about the types of benefits that can be included and the requirements for an effective salary sacrifice arrangement.
The reporting of payments for Salary Sacrifice (to other benefit, OTE) is now disaggregated per the Australian Taxation Office Single Touch Payroll Phase 2 guidance. Rather than being deducted from Gross, Salary Sacrifice (to other benefit, OTE) is reported separately under Salary Sacrifice Type O (PAYEVNTEMP265).
Payments with this Deduction use the $ (or % of Rate Per Hour) set within the Deduction. These payments are considered W1 (Total of Salary, Wages, and other payments), OTE (SGAA) and reduce the Gross (PAYGW) amount.
Salary Sacrifice (to Workplace Giving, OTE) applies when you have established an effective salary sacrifice arrangement and the Payee requests to forego part (either percentage or dollar value) or all of their salary or wages for other approved items such as a novated lease (Fringe Benefit) or a portable electronic device (Exempt Benefit). You can visit the ATO's Website to learn more about Workplace giving programs and the requirements for an effective salary sacrifice arrangement.
The reporting of payments for Salary Sacrifice (to Workplace Giving, OTE) is now disaggregated per the Australian Taxation Office Single Touch Payroll Phase 2 guidance. Rather than being deducted from Gross, Salary Sacrifice (to Workplace Giving, OTE) is reported separately under Salary Sacrifice Type O (PAYEVNTEMP265).
Payments with this Deduction use the $ (or % of Rate Per Hour) set within the Deduction. These payments are considered W1 (Total of Salary, Wages, and other payments), OTE (SGAA) and reduce the Gross (PAYGW) amount.
Salary Sacrifice (to other benefit) applies when you have established an effective salary sacrifice arrangement and the Payee requests to forego part (either percentage or dollar value) or all of their salary or wages for other approved items such as a novated lease (Fringe Benefit) or a portable electronic device (Exempt Benefit). You can visit the ATO's Website to learn more about the types of benefits that can be included and the requirements for an effective salary sacrifice arrangement.
The reporting of payments for Salary Sacrifice (to other benefit) is now disaggregated per the Australian Taxation Office Single Touch Payroll Phase 2 guidance. Rather than being deducted from Gross, Salary Sacrifice (to other benefit) is reported separately under Salary Sacrifice Type O (PAYEVNTEMP265).
Payments with this Deduction use the $ (or % of Rate Per Hour) set within the Deduction. These payments are considered W1 (Total of Salary, Wages, and other payments) and reduce the Gross (PAYGW) amount; however, they are not OTE (SGAA).
Salary Sacrifice (to Workplace Giving) applies when you have established an effective salary sacrifice arrangement and the Payee requests to forego part (either percentage or dollar value) or all of their salary or wages for other approved items such as a novated lease (Fringe Benefit) or a portable electronic device (Exempt Benefit). You can visit the ATO's Website to learn more about Workplace giving programs and the requirements for an effective salary sacrifice arrangement.
The reporting of payments for Salary Sacrifice (to Workplace Giving) is now disaggregated per the Australian Taxation Office Single Touch Payroll Phase 2 guidance. Rather than being deducted from Gross, Salary Sacrifice (to Workplace Giving) is reported separately under Salary Sacrifice Type O (PAYEVNTEMP265).
Payments with this Deduction use the $ (or % of Rate Per Hour) set within the Deduction. These payments are considered W1 (Total of Salary, Wages, and other payments) and reduce the Gross (PAYGW) amount; however, they are not OTE (SGAA).
Union Fees apply when the Payee requests that you deduct an amount from their Pay to be paid to their union or professional association.
The reporting of payments for Union Fees is now disaggregated per the Australian Taxation Office Single Touch Payroll Phase 2 guidance. Rather than being excluded from STP Lodgements, Union Fees is reported separately under Deduction Type F (PAYEVNTEMP227).
Payments with this Deduction use the $ (or % of Rate Per Hour) set within the Deduction. These payments are not considered W1 (Total of Salary, Wages & other payments), Taxable or OTE (SGAA).
Workplace Giving applies when you have established a workplace giving program by ATO guidelines and have chosen not to reduce the amount of PAYG withholding, or if you have not established a formal workplace giving program. Visit the ATO's Website to learn more about Workplace giving programs.
The reporting of payments for Workplace Giving is now disaggregated per the Australian Taxation Office Single Touch Payroll Phase 2 guidance. Rather than being excluded from STP Lodgements, Workplace Giving is reported separately under Deduction Type W (PAYEVNTEMP227).
Payments with this Deduction use the $ (or % of Rate Per Hour) set within the Deduction. These payments are not considered W1 (Total of Salary, Wages & other payments), Taxable or OTE (SGAA).