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The Australian Taxation Office (ATO) requires employers to make a finalisation declaration by 14 July each year, or as soon as possible to ensure employees can access their information to complete their income tax return. 

An STP finalisation event notifies the ATO that this financial year’s payroll is complete, that the figures provided are final, and that no further payments will be made to employees in this financial year.

For those with 20 or more employees, you should be reporting closely held payees each payday along with arm's-length employees. The finalisation due date for closely held payees is 30 September each year.

For smaller employers with less than 20 employees, who only have closely held payees, the payee's income tax return due date is the due date for end-of-year STP finalisation.

For those employers with a mixture of both closely held payees and arms-length employees, the due date is 30 September each year. If you can't make a finalisation declaration by the due date, you will need to apply for a deferral.

In this article, we’ll take a look at how you can ensure your clients are prepared and ready to lodge their finalisation event(s) to the ATO using QuickBooks Payroll powered by Employment Hero.

It’s important to first do some housekeeping before a STP finalisation event is lodged to the ATO. We recommend completing the following checks and reconciliations to ensure all business and employee details are correct.

Table of contents:

  1. Review employee details
  2. Review Fringe Benefits Tax (FBT) settings
  3. Review pay categories
  4. Review deduction categories
  5. Check opening balances
  6. Audit salary sacrifice super/RESC
  7. Finalise pay runs
  8. Reconcile financial year data
  9. Review lodgement authority is correct in client ATO settings

1. Review employee details

Check all employee details are up to date, particularly the employee’s tax file number, email and postal address. A quick way to audit this information in QuickBooks Payroll is by running the Employees Details Report which can be found from the Reports tab (you can view the Reports tab in QuickBooks here).

Make sure to note any closely held employees or foreign employees as these should be reported on separately.

2. Review Fringe Benefits Tax (FBT) settings

Are your clients exempt from FBT under section 57A of the FBTAA 1986? By default, this option will be set to ‘No’ on the ATO Settings page in QuickBooks Payroll, but it’s important to review this and help ensure reportable fringe benefits amounts are reported correctly in the finalisation event.

3. Review pay categories

As part of STP Phase 2, the ATO has new regulations around the disaggregation of gross income, so it’s important to ensure that pay categories are classified as per ATO requirements.

4. Review deduction categories

There are new reporting requirements regarding deductions as part of STP Phase 2

QuickBooks Payroll has added a number of new classifications as well as two salary sacrifice classifications, to categorise the deduction types.

5. Check opening balances

If a client has migrated from another system during the financial year, it’s important to ensure that the opening balances are set up correctly. 

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6. Audit salary sacrifice super/RESC

It’s important to ensure all reportable employer super contributions (RESC) amounts are correctly assigned. Errors in assigning RESC amounts will result in employee amounts not being reported correctly on their Income Statement and the employee potentially being stuck with a tax liability. 

7. Finalise pay runs

Ensure all pay runs with a date paid on or before 30 June 2024 are finalised to avoid having to lodge an amended STP finalisation event.

8. Reconcile financial year data

A crucial part of wrapping up EOFY and reducing filing errors is reconciling employee earnings reported via STP during the financial year with employee earnings processes in finalised pay runs for that same financial year. Here are some tips to make your year-end reconciliation as smooth as possible.

9. Review lodgement authority is correct in client ATO settings

Whether your clients are lodging their own STP finalisation events or you are lodging on their behalf, it is important to confirm their settings are correct with the ATO.

You’re now ready to complete your end-of-year processing, including processing a ST[ finalisation event in QuickBooks Payroll. This can be accomplished by completing the following six steps:

  1. Create a finalisation event
  2. Confirm your payroll data
  3. Enter Reportable Fringe Benefits Tax (RFBT)
  4. Request client authority (only required for registered tax/BAS agents)
  5. Lodge the Finalisation event to the ATO
  6. Send employee notifications

You can read more on each step in our detailed guide on creating and lodging a finalisation event.

For a comprehensive guide to end-of-financial year processing in QuickBooks Payroll, refer to our End of Financial Year Processing using STP FAQs. 

Don’t forget: Super guarantee contributions must reach super funds by 30 June 2024 to qualify for a tax deduction in the 2023/24 financial year. Finalisation declarations can be lodged to the ATO after the financial year up to the 14th July 2024.

The Superannuation Guarantee Contribution (SG) percentage increased to 11%, effective for all pay runs with a date paid on or after 1 July 2023. The maximum quarterly contribution base will also increase to $62,270. Quickbooks Payroll will automatically apply these increases except when businesses have opted out of automatic super updates.

For a comprehensive guide to end-of-financial year processing in QuickBooks Payroll, refer to our End of Financial Year Processing using STP FAQs.

QuickBooks Payroll powered by Employment Hero is an ATO-certified Single Touch Payroll (STP) reporting solution that simplifies the process of creating a finalisation event and lodging with the ATO. With QuickBooks Payroll, you can:

  • Bulk import reportable fringe benefit amounts for employees;
  • Send notification emails from the platform once the finalisation event has been successfully lodged;
  • Process an event encompassing all pay schedules if you are dealing with businesses with less than 2000 active employees, as opposed to creating an event for each individual pay schedule;
  • Auto-calculate any variances between STP reported earnings vs earnings processed in finalised pay runs as part of the reconciliation process; and
  • Access the amended finalisation event wizard if further finalisation events are required. 

Find out more about the benefits of QuickBooks Payroll for your clients and your firm.

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