STP Error
"Reason: Country of Income must be provided. A Foreign Employment Income Type must contain a Country of Income."
Explanation
The country code is picked up via the location setting the employee was paid under. The instructions below provide how the employee needs to be paid and set up for the FEI to report correctly:
Firstly, you will need to ensure that you have some system settings set up before you can assign to the employee. Then you can assign the Foreign Income type/ location and pay category (earnings line) to the employee. When this has been set up, you can report to the ATO via STP that the employee is overseas.
Payroll platform settings
- Setup Pay Categories (Exempt foreign employment income Payment Classification)
- Set up Locations (Foreign Employment Locations e.g. Italy)
- Pay Schedule (not mandatory) if you want to track for reporting
Employee settings required
- Assign FEI Employee Income Type in the Employees Default pay run settings
- Assign Overseas Employee Default Location in the Employees Default pay run settings
- Assign Overseas Default Pay Category in the Employees Default pay run settings
Pay category
With regards to Superannuation, PAYG exemption and Payroll Tax exemption this will be dependant on the individual situations of the business and employees and as such will need to be determined by the business and assigned accordingly.
- Foreign Employment Income and Super Guarantee - Regardless of whether your foreign employment income is exempt from tax, employees may still be entitled to super guarantee.
- Pay as you go and foreign employment income - Employers/employees required to check that their pay as you go withholding meets the end-of-year tax liability if the employee has exempt foreign income.
- Payroll Tax Australia - Employers will need to go to the relevant state/territory legislation in relation to the requirement to pay Payroll Tax on Foreign Employment Income.
Employee tax file declaration
The employees tax file declaration needs to be as per below: (nothing selected):
From here, you will need to ensure that all earnings are reversed out of the old location and paid against the new location with the Country code selected.
For the error: Duplicate Income Stream Type. Only one of each of the following Income Stream Type Code can be provided: SAW, CHP, WHM, SWP, JPD, VOL, LAB, or OSP: There are conflicting income stream types selected in the employee's Tax File Declaration page that need to be reviewed.
This is occurring due to the employees TFN having STP income type selected as FEI however, their tax file declaration has them as SAW.
The STP income type of FE will not show if you have the employees tax file declaration set up as per the above. This will come from the pay category being classed as FEI.