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Transition options available with Single Touch Payroll (STP) reporting

by Intuit Updated 8 months ago

If you are an employer who has to report STP events during the financial year, either because of:

  1. An employer’s granted deferral,
  2. A change of payroll system during the financial year, or
  3. A change of payroll system “between” financial years,

here’s some guidance from us on how to handle it in QuickBooks Payroll powered by Employment Hero.

Select the heading that fits your situation.

Before you start

This can only be authorised by the ATO and we cannot provide any information on whether an employer can defer STP reporting. Refer here to access the ATO's information on deferrals.

If a deferral has been granted, the following information is for you

If a deferral has been granted, the employer will start reporting during the financial year rather than on the first pay after 1 July. In this instance, you will need to report your employees' year-to-date (YTD) data, via an update event, before you submit your first pay event, the reason for this is twofold:

Firstly, an update event includes ALL employees (ie. active and terminated) and is a summary of their YTD data. A pay event, on the other hand, will only include employees who had a payment processed in the pay run and so will exclude previously terminated employees and employees not paid in the pay run/period you are lodging.

Second, all events must be lodged with the ATO in chronological order. The update event must be lodged first to record the initial YTD data and then you can commence lodging pay events (after pay run finalisation).

So, in summary, the process here is:

  1. Create an update event to report the employees' YTD data.
  2. Once the update event has been lodged successfully, process the first pay run after your deferral has ceased and lodge that pay event.
  3. Lodge a pay event for each pay run thereafter. 

Before you start

If an employer changes to a different payroll software during the financial year, the transition process will be dependent upon a couple of things:

  • was the employer reporting STP from the previous software?
  • if they were, will the employer use the same Business Management Software (BMS) ID from that previous software?
  • does the employer want to migrate YTD figures to the new software?

The correct process here will ensure any information reported for STP will pre-fill the employee’s income statements at the ATO accurately.

If this is the case the process will be:

  1. Import YTD figures (for both active and terminated employees) into the new payroll software using the opening balances feature.
  2. Create/lodge an update event.
  3. Continue to create/lodge pay events as normal.

The process here will be:

  1. Change the BMS ID in this payroll system to that of the previous payroll system's BMS ID;
  2. Copy over the employees' payroll ID used in the previous payroll system to the STP Payroll ID field in this system. If you do not have access to the employees' payroll ID, you can ask the employee to access their MyGov account and follow these steps:
    1. Select employment
    2. Select income statements
    3. Select the dropdown arrow
    4. Retrieve the employee number from there.
  3. Import YTD figures into this payroll system using the opening balances feature;
  4. Lodge an update event to report the YTD totals imported.
  5. Alternatively, you can just wait to lodge your first pay event as this will include the imported YTD totals for the employees within that pay run.

Detailed instructions on the first 2 steps of this process can be found here.

  1. Import YTD figures (for both active and terminated employees) from your old payroll into the new payroll software using the opening balances feature.
  2. Zero out the employee YTD values from the old BMS ID (previous payroll software) and then report this via an update event in the old system where you also tick the box Mark as final for each employee (this will notify the ATO that there will be no further payments for these employees from the old BMS ID)
  3. You can do an update event to report the YTD totals imported OR just continue to create/lodge pay events as normal as the first pay event will include (and update) the YTD totals anyway. 

Important to note: if there are any employees in your payroll account that have been terminated in the current financial year you will definitely need to lodge an update event to lodge their YTD data, because they won't show up in any "current" pay events you lodge using this payroll system.

  1. Select Mark as final for all employees when lodging the last pay event in the previous system using the original BMS ID (this will notify the ATO that there will be no further payments for these employees from the old BMS ID)
  2. Do NOT import YTD earnings to the new system (you may need to import YTD figures for leave balances)
  3. There is no need for an update event in the new system, you can just start reporting STP from the first pay run (which will be the next consecutive pay period after the last one that was reported in the old system)

Finishing up with one payroll software provider at the end of one financial year and starting afresh with a new provider at the beginning of the new financial year is perfect timing because each financial year is "separate" at the ATO. 

Just make sure you have finalised your STP reporting for the old financial year in the previous payroll system, then you just need to add your employees and input leave balances into the new payroll software.

Then, you can start reporting STP from the first pay run (which will be the next consecutive pay period after the last one that was reported in the old system). There is no need to continue using the BMS ID and employee ID/STP Payroll ID from the previous provider, as it's a fresh/new financial year you can just use the BMS ID and employee ID/STP Payroll ID created automatically when you turn on STP in your new payroll account and new employee records are created.

However, you must let the ATO know that you've changed payroll providers.

Content sourced from Employment Hero.

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