Allowances paid with employment income 108-22070639

Single Touch Payroll (STP) Assessment of allowances paid with employment income

This information is for STP purposes only

If STP data shows that a customer has had an allowance paid, they will be asked to check, confirm or change the pre-filled details. The allowance type will indicate if the amount needs to be included as assessable income for the reporting period.

Allowance data available through STP will have an indicator to show the assessable components across all reporting channels. This will help customers understand the income used in their fortnightly reporting process.

Allowance types that present through STP

Table 1

Item	Description
1	Task/working conditions allowance – assessable Task/working conditions allowance is a service allowance 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 or first aid.
2	Cents per kilometre – not assessable This allowance defines a set rate for each kilometre travelled for business purposes. This represents the vehicles running costs including registration, fuel, servicing, insurance and depreciation.
3	Award transport - not assessable An allowance to cover the cost of transport (excluding travel or cents per kilometre reported as other separately itemised allowances) for business purposes.
4	Laundry allowance - not assessable An allowance for washing, drying and/or ironing uniforms required for business purposes. Payment of these allowances are typically as a regular rate for each week of work or services performed and cannot include dry cleaning expenses or reimbursements.
5	Overtime meal allowance - not assessable An allowance paid to compensate an employee for meals consumed during meal breaks connected with overtime worked.
6	Domestic or overseas travel allowance and accommodation allowance - not assessable This allowance is in excess of the Australian Taxation Office (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 or incidental expenses.
7	Tool allowance - not assessable This allowance is to compensate an employee who needs to provide their own tools or equipment to perform work or services for the employer. For example, chef's knives, divers' tanks, trade tools or phone allowances.
8	Qualification allowance - not assessable This allowance is paid for maintaining a qualification (that is evidenced by a certificate, licence or similar) that is expected to be expended to maintain a requirement of the job. For example, allowances to cover registration fees, insurance or licence fees.
9	Other Allowance This allowance is any other expense allowances not otherwise separately itemised in the above examples. If this type is pre-filled, the customer will be presented with an extra question –‘Does this amount cover a work related expense that you paid for?' to assist in determining if the amount is assessable or not assessable. If the answer is: Yes, the amount will not be included as assessable income No, the amount will be included as assessable income

Examples of allowances

Table 2

Category title	Description
1	Allowances paid as part of employment conditions Customers may be paid an allowance in addition to their employment income for tasks that involve additional responsibilities or inconvenient working conditions. The gross amount paid for these types of allowances must be included in a customer’s employment income report. Examples of allowances paid for additional responsibility: First aid allowance Safety Officer Trade allowance Leading hand Fire Warden Harassment Contact Officer Examples of allowances paid for working conditions: Danger allowance Height allowance Dirt money Site allowance Shift allowance Location allowance On-call allowance Restriction allowance These lists are not exhaustive, if a customer's allowance is not included in a list, determine if it is assessable based on what it is paid for and how often it is paid.
2	Allowances paid regularly throughout the year for ongoing work related expenses Allowances that are paid regularly throughout the year for ongoing work related expenses are exempt income and do not need to be reported. Examples of allowances generally paid regularly throughout the year for ongoing work related expenses: Tool allowance Laundry allowance Working from home allowance Fuel/Travel allowances paid regularly to cover ongoing expenses These lists are not exhaustive, if a customer's allowance is not included in a list, determine if it is assessable based on what it is paid for and how often it is paid.
3	Allowances paid to cover a one-off work related expense Allowances paid to cover a one-off or irregular work related expense do not need to be included in fortnightly employment income report, unless the allowance is more than the expense incurred. For example, if a customer is paid $100 to travel for work but only spends $60 on travel, they need to include the leftover $40 with their income report. Examples of allowances paid for one-off or irregular work related expenses: Fuel allowance Fares allowance Car allowances Cents per kilometre allowance Travel allowance Accommodation allowance Meal allowance Uniform allowance, including required safety equipment such as work boots Note: if any of the above allowances are or begin to be paid regularly for ongoing expenses, the assessment will change. Refer to Item 2 - Allowances paid regularly throughout the year for ongoing work related expenses These lists are not exhaustive, if a customer's allowance is not included in a list, determine if it is assessable based on what it is paid for and how often it is paid.

Services Australia website links

Income

External websites

Allowances and reimbursements | Australian Taxation Office (ato.gov.au)