Disaggregation of Gross (Payment Types)

(from the ATO's Business Implementation Guide)

STP Phase 1 required Payers to report an aggregated total of YTD gross income amounts. Rather than focus on the IITR classification of assessable income, the data that is to be reported in STP Phase 2 is more aligned to the way the different payment types are categorised in the payroll systems. These payment types now have a common definition and are to be reported by income stream collection for the permissible income types.

Salary Sacrifice has been introduced as a discrete payment type (as a positive amount) that now requires all other payment types to be reported as the pre-sacrificed YTD amounts.

For Services Australia the disaggregation of gross will provide the granularity to support the accurate application of employment income across the relevant welfare payments and services it is responsible for administering. This will improve the accuracy of payments, ensuring individuals receive the right payment at the right time.

This change will also ensure the flexibility of the data use by Government in the future, and the full visibility of income for ATO and Services Australia to assess, given the different definitions used by the agencies.

Negative YTD Amounts

A key concept of STP Phase 1 was that Payee YTD amounts could not be negative. With the introduction of disaggregation of gross, some payroll systems, when calculating corrections, may produce a negative YTD amount for the payment type. To accommodate this, the ATO will allow the reporting of negative YTD amounts for the following payment types:

  1. Gross Amount.

  2. Paid Leave Payment Amount.

  3. Payee Allowance Amount.

  4. Overtime Amount.    

  5. Bonuses and Commissions Amount.    

  6. Directors' Fees Amount .

7.    Lump Sum Payment Amount (Type-W only) .        

8.   Salary Sacrifice Amount.

Whilst each of these payment types permit negative YTD amounts, the sum of the payment types (items 1-7) less the Salary Sacrifice YTD amount (item 8) must be zero or a positive amount.

ATO Derived Aggregated Gross

To manage the introduction of negative YTD amounts, a new concept of ATO derived aggregated gross income will be introduced. Whilst specific payment types may be negative, the sum of the payment types (items 1-7 in the previous section) less the Salary Sacrifice YTD amount (item 8 in the previous section) must be zero or a positive amount per income stream collection.

This new YTD amount will be derived by summing the payment types listed above and deducting the Salary Sacrifice Amount.