The fees and workplace giving items are identified discretely to enable them to be pre-filled in the IITR. Additionally, payers may vary withholding arrangements for payees who participate in a workplace giving program. The workplace giving amount is included in gross for reporting.
There is an option for payers to voluntarily report Child Support Deductions and Garnishees through STP as per section 389-30 of Schedule 1 of the Taxation Administration Act 1953. Where a payer reports these amounts through STP, it will extinguish their obligations to separately report these amounts directly to the Child Support Registrar (the Registrar). Payers who do not report these amounts under STP are still required to report to the Registrar.
Where the Registrar has given written notice to a payer to deduct a specified amount from a payee, payers are obliged to withhold money from payees and pay it to the Registrar.
The values permissible for the deduction type codes are:
- F (Fees) – 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 with the existing payer
- W (Workplace Giving) – workplace giving program donations to charities or organisations that are entitled to receive tax deductible donations.
- G (Child Support Garnishee) – deduction made under a notice as per section 72A of the Child Support (Registration and Collection) Act 1988. This is a percentage of a payee’s taxable gross income, a lump sum or a fixed amount each pay until the debt is satisfied.
- D (Child Support Deduction) - deduction made under a 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).
Note: Amounts reported for Child Support Garnishee and Child Support Deductions will not be displayed on the ATO Income Statement.
Example of a Child Support Deduction
- A payer receives a notice to make child support deductions from a payee’s wage (section 45 of the Child Support (Registration and Collection) Act 1988
- The notice specifies the payer is required to deduct $200.00 per fortnight from a payee’s pay as a ‘child support deduction’
- The payee is paid on a fortnightly basis. The payer can include the deduction in the submit action, reported on or before the date of payment (payday)
- The payee’s period start date is 17 August 2020. The payee’s period end date is 30 August 2020. The payee’s date of payment (payday) is 2 September 2020
- The payee’s gross taxable income per fortnight is $1,100. The protected earnings amount (PEA) per fortnight is $747.06. The tax-withholding amount is $96.00
- The payer reports the new $1,000.00 YTD amount (5 pays) for the payee as Deduction Type code D (Child Support Deduction), reflecting the period amount of $200.00 as Child Support Total Deductions Amount for the payee