Tax and Super Settings for Pay Items
Each pay item in Myaccountant has configurable tax and superannuation settings that determine how PAYG withholding and super guarantee are calculated. Correct configuration ensures compliance with ATO requirements and accurate STP reporting.
Tax Settings
When creating or editing a pay item, you can configure the following tax options:
Subject to PAYG Withholding
- Yes — the pay item amount is included in the employee's taxable gross pay and PAYG tax is calculated on it. This applies to most earnings and allowances.
- No — the pay item is excluded from PAYG calculations. This applies to items like salary sacrifice deductions (which reduce taxable income).
ATO Reporting Category
Select the correct STP category so the pay item is reported accurately to the ATO:
- Gross Payments — standard wages and salary.
- Allowances — travel, meal, uniform, etc.
- Overtime — overtime earnings.
- Bonuses and Commissions — lump sum or incentive payments.
- Directors' Fees — payments to company directors.
- Lump Sum W — return-to-work payments.
Super Settings
Ordinary Time Earnings (OTE)
- Yes — the pay item is classified as OTE and attracts the Superannuation Guarantee (SG) contribution.
- No — the pay item does not attract SG. Examples include overtime (unless specified by an award), reimbursements, and some allowances.
Key OTE Guidelines
| Pay Type | OTE? |
|---|---|
| Ordinary hours | Yes |
| Overtime | No (usually) |
| Annual leave | Yes |
| Personal/carer's leave | Yes |
| Bonuses and commissions | Yes |
| Allowances | Depends on award |
| Salary sacrifice | Reduces OTE |
tip
When in doubt, refer to the ATO's ruling on OTE (SGR 2009/2) or consult your accountant. Incorrect OTE classification can lead to super guarantee charge (SGC) penalties.