The Tax Treatment field is a read-only field that is populated based on selections made in the Employee Tax Details and if applicable, the TFN Declaration. An employee’s Tax Treatment code is a six-character code that represents a summary of their current tax position. This code is found in Employee, Payments, Tax, STP Reporting. Once you commence reporting through STP2, Tax Treatment is included in STP Reporting events sent to the ATO.
Each Character in the code represents a different factor that affects how the employee is taxed eg: they receive regular SAW payments, are claiming the tax free threshold, have not provided a TFN, have a Medicare levy variation, etc.
Position | Represents | Example |
1 | Tax Category | R for regular payments, H for Working Holiday Maker |
2 | Options per Category | T for tax free threshold claimed. C for Commissioners instalment rate |
3 | Study and training support loan | S when employee has an STSL debt |
4 | Medicare levy surcharge variation | 1,2 or 3 based on tier level |
5 | Medicare levy exemption | F is reported for full exemption |
6 | Medicare levy reduction | O (zero) for spouse only, 1-9 for dependent children |
The list of valid character combinations is extensive, refer to the following ATO article for more information about tax treatment and individual code characters, as well as lots of other useful information about STP2.