This end of financial year is the first under Single Touch Payroll (STP) for many of your clients. The most significant and time-saving benefit of reporting information via STP is that your clients are no longer required to issue employee payment summaries at the end financial year.
Payment summaries have been replaced by finalisation. At the end of the financial year, the employer will finalise each employee in their payroll software. This tells the ATO that they have provided all the required information for the financial year.
The ATO will then pre-fill the employee’s income tax return in myGov and mark it as “tax ready” for the employee or tax agent to finish and submit their return online. The ATO will send a notification to the employee when their income statement is ‘tax ready’.
Free STP employee fact sheet
Employers need to notify their employees that the way they receive their payment summary is changing. Attaché’s free STP employee fact sheet covers everything staff need to know, including how to create a mygov account. You can share a copy with your clients, regardless of what payroll software they use. Download now.
The deadline for end-of-year finalisation is 14 July. However, the ATO has provided additional time for employers to make the finalisation declaration in their first year of reporting through STP. So if a client started reporting in the 2018/19 financial year, they have until 31 July 2019. Even if they only submitted (and ATO confirmed) once via STP during the financial year, the ATO expects them to finalise their employees.
Key differences between payment summaries and STP finalisation
|Payment summaries||STP finalisation|
|Reconcile several reports for the whole year||Reconciling throughout the year|
|Check for issues||Issues are resolved with each batch submission|
|Create payment summaries||Finalisation via STP replaces payment summaries|
|Issue payment summaries to employees||ATO pre-fills employee income tax return in myGov|
|Provide the payment summary annual report to ATO||No longer required|
|If an employee misplaces a payment summary, required to reissue||Employee information is always available via myGov|
Download your free STP employee fact sheet now.
Want to know more? Speak to one of our payroll specialists or call us on 1300 288 224.
Mike Rich | Attaché Software
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