Each amount you pay to an employee will now be assigned to an income type, and you can report amounts assigned to multiple income types throughout the year.
The reporting of income types helps us identify when:
- the employee’s income may be taxed differently (such as for working holiday makers)
- you are using a concessional reporting arrangement (such as for closely held payees)
- there may be other factors influencing the amounts you are reporting (such as foreign tax obligations and applicable tax treaties).
The following table shows the different income types for STP Phase 2 and when to use them.
Income type | When to use this income type |
|---|---|
SAW (salary and wages) | Most STP reporting will use this income type. It covers the most common kinds of payments to an employee like regular salary and wages. If the payments you are making to your employee don't belong in one of the other specific income types, use the SAW income type. |
CHP (closely held payees) | If you have 19 or fewer employees and are using the concession available for reporting closely held payees through STP in relation to the individual, then you must use this income type to tell us that you're using the concession. If you are not using the concession available for reporting closely held payees, then you don't need to use the CHP income type and may use the SAW income type instead. This includes where you aren't eligible for the concession or have chosen not to use it. |
WHM (working holiday makers) | This income type tells us about the income a person has earned while they were a working holiday maker. Use this income type when you're making payments to a person that is a working holiday maker. This means they're a temporary visitor to Australia holding a subclass 417 (working holiday) or subclass 462 (work and holiday) visa. |
FEI (foreign employment income) | This income type tells us about the income an Australian tax resident has earned while working overseas where the qualifying period for foreign employment income is met. This information assists them to identify where tax has been paid on income in a foreign country and to complete their tax return. |
IAA (inbound assignees to Australia) | You must use this income type to tell us that you're using the concession available for reporting inbound assignees to Australia through STP in relation to the individual. If you're not using the concession available for reporting inbound assignees to Australia, you don't need to use the IAA income type and may use an appropriate other income type instead. |
SWP (seasonal worker programs) | This income type tells us about the income a person has earned while they were participating in certain labour mobility programs. Use this income type to report payments to participants in the Seasonal Worker Program and participants in the Pacific Australia Labour Mobility (PALM) scheme who have told you on a TFN declaration that they are a non-resident. Don't use this income type to report payments to participants in the Pacific Labour Scheme and participants in the PALM scheme who have told you on a TFN declaration that they are a resident. Use the SAW income type instead. |
JPD (joint petroleum development area) | This income type is used for making amendments to your previous STP reporting about payments made to workers in the Joint Petroleum Development Area (JPDA). You can only use this income type to make amendments to your STP reporting for the 2019–20 or earlier financial years, because the tax arrangements relating to the JPDA changed in 2019. |
VOL (voluntary agreement) | Use this income type to report payments that are subject to a voluntary agreement for PAYG withholding. This income type relates to contractors that have a voluntary agreement in place. Don't use this income type to report amounts paid to employees. Use the relevant income type such as SAW. |
LAB (labour hire) | Use this income type to report payments by a labour hire firm that arranges for persons to perform work or services, or performances, directly for their clients. This income type relates to contractors only. It doesn't include amounts paid to employees of labour hire firms. Employees of labour hire firms should be reported as the relevant income type, such as SAW. |
OSP (other specified payments) | Use this income type if the payments you are reporting are the specific payments specified by regulation 27 of the Taxation Administration Regulations 2017External Link. |
Different payroll solutions will handle changes to income types differently. If you need to change an income type during the year, you should follow your DSP’s instructions.
Example: income type reporting
Backpacker Farms Pty Ltd employs Jane, who is from Europe and has come to Australia on a working holiday maker visa. They include the amounts they pay to Jane in their STP reporting under the income type of WHM (working holiday maker).
Jane’s working holiday maker visa is about to expire, and she applies for a different type of visa that will allow her to remain in Australia. She is granted a new visa which comes into effect on 1 February.
The payroll solution used by Backpacker Farms Pty Ltd enables the same Payroll ID to have multiple income types. When they pay Jane after 1 February, they include:
- a YTD amount against the WHM income type that is the amount they paid Jane before 1 February, and
- another YTD amount against the SAW income type that is the amount they paid her after 1 February.
At the end of the financial year, Jane logs in to ATO online services to complete her tax return. She is able to easily identify the amount she needs to report as working holiday maker income, which is taxed differently. This is because her income statement shows the amount she earned as a working holiday maker before 1 February and also the amount she earned as regular salary and wages after 1 February.
Note: if your payroll solution requires you to use separate Payroll IDs for different income types then your employee will see separate income statements in ATO online services.
End of exampleCountry code
You must report a country code when you make payments to employees with the following income types:
- foreign employment income (FEI)
- inbound assignees to Australia (IAA)
- working holiday maker (WHM).
If you make a payment to an Australian resident working overseas using the FEI income type, you must provide information about the host country.
If you make a payment to a working holiday maker or inbound assignee, you must provide information about their home country. The home country that you report may not always be the country where the person usually lives.
- For the WHM income type, the home country you report is their country of nationality based on their working holiday maker visa.
- For the IAA income type, the home country you report is the country of the payroll from which they are paid.
You must report a country code where it is required. You can't report 'Not Applicable'.
If you use a product that displays the country code as a 2-letter abbreviation, don't use the code 'na' to mean 'Not Applicable'. For STP reporting we use the ISO 3166-1 standard country codes, and the code 'na' refers to the country of Namibia.
Example: country code
Bjorn is Danish. He has been living and studying at university in Sweden and is now travelling to Australia on a working holiday maker visa using his Danish passport.
When he arrives, Bjorn's Australian employer checks to ensure that Bjorn has the right to work in Australia based on his Danish passport and working holiday maker visa.
When Bjorn's Australian employer uses the working holiday maker (WHM) income type to report amounts she has paid to Bjorn, she reports the country code 'dk' to represent Denmark.
End of example