From 1 October 2026, the ATO is changing the way Award Transport Payments are treated and reported. These payments will no longer receive special tax treatment, PAYG withholding will no longer be varied to nil, and they can no longer be reported under the Award Transport Payments allowance type.
Payments made on or after this date will need to be reported under the allowance type that best matches what the payment is for.
What you need to do
Before your first pay run on or after 1 October, create or select a new Other Allowance pay item in Reckon using the appropriate STP sub-type:
- T1 – Transport or Fares Allowance for transport or fare expenses
- V1 – Private Vehicle Allowance for using a private vehicle for work
If you're unsure which category applies, please check with your accountant or the ATO.
Learn how to setup pay items in Reckon One
Choose how you'd like to transition
Option 1 – Cutover
Stop using your existing Award Transport Payments pay item and use your new allowance pay item for payments from your cutover date onwards.
Option 2 – Zero out YTD amounts
If you'd also like to correct amounts already reported this financial year, you can zero out the YTD amount against your existing Award Transport Payments pay item and re-report it against your new allowance pay item.
These adjustments can be made from the employee's initial YTD screen and will be included in your next STP submission.
Learn how to update YTD balances in Reckon One
Please make these changes before your first applicable pay run on or after 1 October 2026.
We recommend reviewing your setup now to make sure you’re ready for the change.
Questions?
Do you have a question about how to setup pay items in your Reckon One book? Click HERE to create a new post and we'll do our best to assist.
