STP country codes¶

In Single Touch Payroll (STP) Phase 2, each employee's pay is grouped by an income type — a label that says what kind of income it is. For some income types, that is not enough. The pay must also carry a country code: a short code that names the foreign country the income relates to.

The country code tells the Australian Taxation Office (the ATO) which other tax jurisdiction is involved. Not every employee needs one. It is only used for the income types where a foreign country matters.

In one line

Some income types must be reported with a country code, so the ATO knows which foreign country the pay relates to.

Why this matters¶

Australia has tax treaties with many countries. When income touches another country, the ATO shares information with that country's tax authority. The country code is how the ATO knows which country to check against. Reporting it correctly keeps your employee's records right and helps Australia meet its international agreements.

What you will learn¶

What a country code adds to an STP report
Which income types must carry a country code
Which country's code is used for a working holiday maker

Understanding the concept¶

Behind the scenes, STP Phase 2 groups pay into what the ATO calls the Income Stream Collection — pay labels grouped by income type, and for some income types, by country code. The ATO names three income types that must report a country code:

Foreign employment — for an Australian tax resident who worked overseas or provided services to an organisation outside Australia. The code is the country where the work was performed or where the foreign entity is located (the "host" country).
Inbound assignees to Australia — someone sent to work in Australia for an Australian business, but employed and paid, in whole or part, by an offshore entity. The code is the country of that offshore entity (the "home" country).
Working holiday makers — people on a working holiday visa (subclasses 417 and 462 only). Their income is reported by the country code of their visa (their "home" country).

We do not list the country codes here. There is a long ATO list, and it can change as new tax treaties are formed.

For accountants & bookkeepers

Country codes apply to the Income Stream Collection only. The ATO states that where a country code applies, all payment types (labels) within the collection must be reported for each combination of income type and country code. The "Other Components" reported outside the collection — deductions, super entitlements and reportable fringe benefits amounts — are reported without any income type or country code.

Example¶

A café hires Lena, who is on a 417 working holiday visa. Because she is a working holiday maker, her pay is reported under the working holiday maker income type, and it carries the country code of her visa's home country. A second employee, Tom, is an Australian resident sent to work overseas for the qualifying period. His pay is reported as foreign employment, with the country code of the country where he did the work.

Common mistakes¶

Thinking every employee needs a country code — most do not; it is only for the income types listed above.
Using the country an employee is currently in, rather than the country the code rule actually points to (for a working holiday maker, their visa's home country).
Assuming a working holiday visa of any subclass counts — the ATO names subclasses 417 and 462 only.

How this works in myaccountant¶

In the app — myaccountant builds the STP report from your pay run and routes each employee's pay to the correct income type. Where an income type needs a country code, it is reported as part of that employee's income stream.

Key points¶

A country code names the foreign country an income type relates to.
Only some income types carry one, not every employee.
Foreign employment uses the country where the work was performed (host country).
Inbound assignees use the country of the offshore entity (home country).
Working holiday makers (visa 417 or 462) use their visa's home country.
We do not reproduce the ATO country-code list here — it can change.

Learn next¶

General information only — not tax, super or financial advice.

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