End of Financial Year Processing using STP | FAQ

If your business consists of all closely held employees, you can delay STP reporting until the 201/22 Financial Year. From the 22/23 Financial Year onwards, you'll be required to report closely held employees using STP. Learn more about how to Lodge Single Touch Payroll (STP) events for closely held employees.

Employers that are 1. exempt from fringe benefits tax under section 57A of the Fringe Benefits Tax Assessment Act and 2. have enabled it in the ATO Settings under Payroll Settings, will now be provided with an additional setting. This setting deals with separating entertainment-related fringe benefits from other fringe benefit amounts.

As part of STP reporting, the data transmitted to the ATO separates reportable fringe benefits amounts into exempt and non-exempt amounts.

Specifically, a separate single gross-up cap of $5,000 applies to fringe benefits that are salary packaged meal entertainment and entertainment facility leasing expenses.

If employees are eligible, you must configure the business settings to allow separate reporting of RFB amounts.

To enable separate reporting:

1. Navigate to Payroll in the left hand menu.
2. Select Payroll Settings, then ATO Settings.
3. In the ATO Settings, select Yes under Are employees entitled to a separate cap for salary packaged entertainment benefits as per section 6.5 of the Fringe Benefits Tax legislation?
4. Select Save.

Employees completing a Tax File Declaration Form have to specify what loans (if any) that they have:

• Higher Education Loan Program (HELP)
• Student Start-up Loan (SSL)
• Trade Support Loan (TSL)
• Student Financial Supplement Scheme (SFSS)

From 1 July 2019, HELP, SSL, TSL, SFSS will be consolidated under one name - Study and Training Support Loan (STSL) and one tax table. This change applies to all new and existing employees.

On pay runs with a date paid before 1 July 2019, the Withheld Amounts column is broken down into PAYG, SFSS and Help. However, after 1 July 2019, the Withheld Amounts column is broken down into PAYG and STSL. This change is also reflected when generating payroll reports and pay slips.

1. Select Payroll on the left menu.
2. Select Payroll Settings, then select Pay Categories.
3. Select the pay category name of your allowance.
4. Select the Payment Summary Classification drop-down menu.
5. Ensure that the allowance is allocated to the correct Payment Summary Classification.
6. Select Save.

It's essential to make sure that the Reportable Employer Super Contributions (RESC), otherwise known as Salary Sacrifice Super, is set up correctly. Otherwise, the employee year-to-date (YTD) amounts will be incorrect when reporting to the Australian Taxation Office (ATO), and the employee may be requested to owe money to the ATO.

To conduct an audit of RESC payments recorded for the financial year, run a Deductions Report and a Super Contributions Report, then compare the two for discrepancies.

Generate a Deductions Report

1. Select Payroll from the left menu.
2. Select Reports, then select Deductions Report.
3. Enter the date range of the financial year, then select the Deduction Category.
4. Select Run Report.

Generate a Super Contributions Report

1. Select Payroll from the left menu.
2. Select Reports, then select Super Contributions.
3. Enter the date range of the financial year, then select Contribution Type to Salary Sacrifice.
4. Select Run Report.

Compare the total amounts between both reports. If they don’t match, identify where the differences lie. The way to fix the differences depends on whether the amount comes from Opening Balances or from within a pay run.

Fixing RESC amounts incorrectly entered via an employee’s opening balance

1. Select Payroll on the left menu.
2. Select the employee’s name, then select Opening Balances.
3. Select Deductions, and make sure the Include on payment summary as RESC option is ticked.
4. Select Save.

Fixing RESC amounts incorrectly entered via a Pay Run

1. Select Payroll on the left menu.
2. Select New Pay Run.
3. Select Create.
4. Select the name of the employee affected, then select Actions.
5. Select Make Deduction, then enter the correct adjusting amount.
6. Select Save.
7. Select Finalise Pay Run.

If a pay run is not finalised, it will not be reported to the ATO. If you lodge your finalisation event before finalising all pay runs for the financial year, you will then need to lodge an amended finalisation event so that the correct YTD figures are reported to the ATO.

Learn how to create and lodge an amended Finalisation Event.

Best practice is to make sure that you successfully lodge all pay events before lodging subsequent events. However, for the purpose of lodging the finalisation event, it does not matter if all prior pay or update events have not been successfully lodged, as long as all pay runs have been finalised.

Once you start reporting successfully through STP, you must also complete a finalisation event and NOT generate payment summaries/payment summary annual report (PSAR) as payroll data sent to the ATO will be duplicated.

Create an update event to make that all employee pay run data has been captured for the financial year. Then, you can proceed to create a finalisation event. Learn how to create and lodge an update event.

You can lodge a Finalisation Event if you haven't been lodging STP events throughout the year. As long as you have registered for STP and have finalised pay runs for the Financial Year, you can lodge a Finalisation Event.

Note: If you do this, don't also issue payment summaries and lodge a PSAR with the ATO, as this will double up your data.

Your terminated employees will show up in the Finalisation Event if you haven't lodged an Update Event before the Finalisation Event.

If you have lodged an Update Event, the terminated employees will not show up in the Finalisation Event, given that they were marked Is Final in that Update Event. The Is Final signifies to the ATO that the Update Event is treated as a Finalisation Event for that particular employee.

As the employees have been included in either an Update Event or Finalisation Event, you mustn't generate payment summaries or PSAR for them.

If you've been reporting STP events in the previous payroll software, make sure that the terminated employee is marked Is Final in their final STP event. If this is the case, then nothing further is required.

If the employee is not marked as Is Final, then lodge an Update Event in the previous payroll software and mark the employee as Is Final.

Note: Don't add the terminated employees into QuickBooks Payroll after doing the above steps.

If you have NOT been reporting STP events in the previous payroll software, there are two options you can take to account for this:

1. Keep the terminated employee’s data in the previous payroll software and generate payment summaries for that employee.
2. Add terminated employee’s data into QuickBooks Payroll and enter their YTD data using Opening Balances, so that they are included in the Finalisation Event. If you choose this option, you are not required to generate payment summaries for the terminated employee.

With STP, payment summaries will not be generated. However, employees will now be provided with Income Statements that are available via their myGov account.

No, lodging an Update Event with all employees marked as Is Final is sufficient enough to close off the Financial Year's data with the ATO. You do not have to lodge a Finalisation Event if you have done this.

You don't need to process a Finalisation Event for the regular pay schedule and the ad-hoc pay schedule.

Just by creating the Finalisation Event for the regular schedule, the YTD amounts are captured for all active employees in both schedules (who aren't marked as Is Final in previous events).

The YTD amounts will also include earnings paid using a different pay schedule during the financial year.

Yes, you can create an ad-hoc pay run, then create an amended Finalisation Event. But make sure you notify your employees that an adjusted pay is required and to get them to hold off on lodging their individual tax return, as the successfully lodged original Finalisation Event would have marked the employee’s Income Statement as Tax Ready.

Once you have finalised the ad-hoc pay run, create the amended Finalisation Event:

1. Select Payroll on the left menu.
2. Select Reports, then select Single Touch Payroll.
3. Select the drop-down next to Start Finalisation Process, then select Create an amended Finalisation Event.
   • This option only appears once a successful finalisation event has been lodged.
4. Select the Pay Schedule and add the affected employees.
5. The process will now be the same as a Finalisation Event.