Single Touch Payroll (STP) End-of-year Finalisation
Did you know if you use STP to pay your employees, as an employer you need to make a finalisation declaration by 14 July?
However, Australian Taxation Office (ATO) recognise the impacts of COVID-19 on the Australian community and If you need additional time, you can complete your STP finalisation up until 31 July.
It’s important that you finalise your employees’ data by 14 July if you can, and let your employees know when you have so they can lodge their income tax returns.
Employers with closely held payees
If you have 20 or more employees, you should be reporting closely held payees each pay day along with arms-length employees. The finalisation due date for closely held payees is 30 September each year.
For small employers (19 or fewer employees) who only have closely held payees, the due date for end-of-year STP finalisation will be the payee’s income tax return due date.
For an employer with a mixture of both closely held payees and arms-length employees, the due date for end-of-year STP finalisation for closely held payees is 30 September each year. All other employees are due 14 July each year.
Making a finalisation declaration
Before making your finalisation declaration, make sure your STP information is correct.
If you can’t make a finalisation declaration by the due date, you will need to apply for a deferral.
You can finalise your data earlier if it’s ready. The sooner you finalise your employees’ information, the sooner they will be able to lodge their tax returns.
This finalisation process is explained in detail in the STP employer reporting guidelines, including amendments for current and previous financial years.
When you have reported and finalised your employees’ information through STP, you are exempt from:
- Providing payment summaries to your employees
- Lodging a payment summary annual report.
For payments to your employees that were not reported through STP, you still need to:
- Give a payment summary to your employees
- Provide ATO with a payment summary annual report for these payment summaries.
Making an amendment
If you identify that you need to make an amendment after you have submitted a finalisation declaration, you’ll need to submit these as soon as possible. You can make the amendments to finalised STP data in your STP solution.
We recommend you tell your employees when you make an adjustment that will be reflected in their income statement. If they have already lodged their tax return they may need to lodge an amendment.
What to tell your employees
You will need to tell your employees:
- You are no longer required to provide them with a payment summary for the information you’ve reported and finalised through STP
- They can access their year-to-date and end-of-year income statement online through mygov or talk to their registered tax agent
- ‘Income statement’ is the new term for their payment summary
- To wait until their income statement is ‘Tax ready’ before lodging their tax return
- To check their personal details and if necessary, update with both you and the ATO (incorrect personal details may prevent them from seeing their STP information)
What your employees will see
STP allows your employees to view their payment information at any time in our online services through myGov.
On 1 July, they will see the status of this information change from ‘year-to-date’ to ‘not tax ready’. It will stay like that until you submit your finalisation declaration.
When you have made the finalisation declaration, your employees will see the status of their payment information change to ‘tax ready’.
Some employees like to lodge their tax returns early in July and may choose to do so before you have finalised their STP information. ATO will make it clear to them that their income statement is not ‘tax ready’. If they choose to use the un-finalised information, they will need to acknowledge that:
- You may finalise their income statement with different amounts
- They may need to amend their tax return and pay additional tax.
Employees with more than one employer
If your employees have more than one employer, remind them that not all employers have started STP reporting yet.
They will still receive a payment summary from employers who are not yet reporting through STP.
Employees without a myGov account
As a Registered Tax Agent we can help to access to your income statement information.
Use one of the method below that most suit you to contact us to find out how.