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Check Earnings Rate Category

Marsha Galicia avatar
Written by Marsha Galicia
Updated over 3 weeks ago

XBert Type: Standard
Accounting Software: Xero
Country Restriction: AU only
Risk Type: Payroll Risk
Business Function: Payroll

Overview

The "Check Earnings Rate Category" XBert ensures that bonus and commission pay items are correctly categorised in line with ATO reporting requirements, specifically for STP Phase 2 compliance. Accurate classification helps avoid incorrect superannuation calculations and reporting discrepancies.

What it does

This XBert reviews the earnings pay items configured in your accounting software and checks whether:

  • Bonus-type pay items are correctly categorised under “Bonuses and commissions”

  • The superannuation setting for these pay items is correctly applied (e.g. included or exempt)

It flags any instances where bonus pay types are incorrectly categorised or where super treatment is inconsistent.

How it works

XBert scans each earnings rate pay item and:

  • Identifies whether its category aligns with STP Phase 2 requirements

  • Checks if the item is marked as “Exempt from Super” when it shouldn’t be

  • Raises an alert if it detects a mismatch

For example, a bonus pay item may be set to the “Default” category instead of “Bonuses and commissions”, or it might incorrectly be marked as exempt from super contributions.

Example/Use Case

Ben sets up a bonus for staff at the end of each quarter. He creates a new earnings pay item in Xero but leaves the category as “Default” and marks it as exempt from super. XBert detects this misclassification and triggers an alert.

On review, Ben realises that the ATO requires bonuses to be reported under a specific category for STP Phase 2 and that his setup may result in underpaid super. He updates the category and super settings accordingly.

Accounting software

Xero only.

Which countries it supports

Australia only.

Processes

This XBert is part of the Payroll – Superannuation process.

To resolve:

  • Open the affected pay item in your accounting software (e.g. Xero Pay Items)

  • Update the earnings rate category to “Bonuses and commissions” if applicable

  • Ensure the superannuation settings are aligned with Fair Work and ATO guidelines

Accurate earnings classifications help avoid compliance issues and ensure employees receive the correct entitlements.

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