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Come on, guys. This has been an issue for over three years.

Xero already has a Travel Allowance category that can be marked as exempt for W1, which means the BAS report calculates correctly. However, the pre-filled STP report still includes the travel allowance amount as part of wages.

How hard can it be to update the STP reporting so that travel allowances marked as exempt are also excluded from the wages reported through STP?

The current workaround is also creating unnecessary risk. Instead of having a Travel Allowance payroll category with a fixed rate and a quantity field that automatically calculates the correct amount, our payroll staff are having to manually calculate and enter the "reimbursement" amount.

This is inefficient and, more importantly, leaves us open to payroll errors.

Surely the W1 exemption and STP reporting should be consistent so that once the Travel Allowance is correctly classified, Xero automatically handles the reporting correctly across both BAS and STP.

This has been an issue for more than three years. It really should be resolved by now.

This is extremely important function that we need to be able to record non reportable allowances.
If i am to use reimbursements I am unable to report how many eg. OT Meal Allowances I wish to pay for a long distance truck driver. The employee expect that they would see 4 x Allowance amount.
Thank you for reading and appreciated that this tool would assist a number of our clients.

Hi David,
To be equally upfront - this is completely unacceptable and extremely poor. Your only concern seems to be the ATO requirements - however you seem unaware or indifferent to the fact that Total Earnings on the payslip are misstated by not including the non-reportable allowances. The ATO should not be the primary driver here. Xero is supposed to be accounting software but your only concern seems to be tax compliance. This is just plain wrong and I would have thought embarrassing for Xero as Xero do not seem to grasp the basic concepts here.
I'm staggered that something which would be such an easy fix has been ignored. It is extremely frustrating and reflects very poorly on Xero.

This is a very frustrating limitation that has been ongoing for quite a while. Would really love to see this fixed

If an Allowance Type MUST be reported on STP it doesn't make sense that the item in the payroll item setup allows you to untick the "Reportable as W1 on Activity Statement" .

This creates contradictory reporting between the BAS report and the STP submission.

The attached reports (BAS and STP) show a $2,806.00 discrepancy because an STP mandatory TYPE of allowance had "Reportable as W1 on Activity Statement" unticked

This is disappointing. At the moment we are required to manually revise each payroll individually, which is extremely time‑consuming. I’m hoping a permanent rectification can be implemented ahead of the 27/28 financial year.

this needs to be actioned asap for accuracy on employee payslips and tax reporting.

Glad you have combined an idea - when will this vital issue be fixed??

Spot on, I have just had an employee do their income tax return and this has caused major issues and created a tax debt because of how the prefilling reports come across and how it flows through.

Exactly Suzanne - they spend too much time on the flashy glitzy new features to attract new customers and can't find time to fix the dull (but essential) basics for their existing customers...it's very, very, disappointing...particularly when it should actually be quite an easy fix for them

Lea, they are too busy 'fixing things' that aren't even broken like menu design and layouts..

When is this issue going to be fixed? We raised it months ago with Xero and were assured it was on their list...
The way it works currently is completely incorrect.

This absolutely needs to be done. I was wrongly under the impression that by deselecting not reportable at W1 it would not be reported through STP.... Not the case it would seem. I also don't believe processing it as a re-imbursement is the correct way to go about it. I am assured it is still ATO compliant by doing it as a re-imbursement, but I am not sure how, when as an allowance we do not require receipts!

it's ridiculous that this is still not a feature - either meet all the ATO requirements for STP Phase 2 or don't provide payroll at all

Our company agrees very strongly that these non reportable allowances (in our case meal allowances) should be shown as salary on payslips (despite being non reportable for STP purposes) rather than shown as a reimbursement (which is completely incorrect).

I am also experiencing this issue and would like to be updated on an answer from Xero for when it will be fixed. Currently, I am correcting the Activity Statement (not using the pre-filled ATO amounts) but it is not good that the Xero STP reconciliation does not match the ATO!

This is an essential feature.

Any progress on this?

This issue needs to be fixed.

We've been making allowances for Xero for too long 😝