- Pay codes: make sure you have set up your pay codes correctly, and that payments including allowances, paid leave and overtime are itemised separately.
- Continuity of year-to-date (YTD) reporting: if you transitioned to STP Phase 2 reporting part-way through the financial year, check that they have maintained the YTD amounts that have already been reported through STP Phase 1. This includes salary and wages paid to your employees, employment termination payments, pay as you go withholding amounts, and more. This applies unless you used an alternative method for transitioning to STP Phase 2.
- Employee details: information such as an employee’s name, tax file number and date of birth helps the ATO to match employer STP records with their employees. As we approach tax time, now is a good time to make sure these details are accurate and complete.
- Employment basis: employers need to report accurate information about their employees’ employment basis (such as full time, part time, or casual) each time they run their payroll.
COMMON ISSUES TO AVOID – STP FINALISATION DECLARATIONS
Some common issues identified with STP finalisation declarations are below.
ENSURE YOU FINALISE THE CORRECT FINANCIAL YEAR
A common mistake employers make is finalising their employee records for the incorrect financial year. This may be caused when the declaration is being lodged after 30 June. Also, when making your finalisation declaration, check your employees' year-to-date (YTD) amounts are correct.
SUBMIT A FINALISATION DECLARATION FOR ALL EMPLOYEES
You need to lodge a finalisation declaration for all employees you have paid and reported through STP during the financial year. This includes those employees who may have only worked for part of the financial year, for instance terminated employees and casuals.
This will make sure you are meeting your obligations and will help your employees lodge their tax return with finalised information.
CHANGING PAYROLL SOFTWARE OR PAYROLL IDS DURING THE FINANCIAL YEAR
Sometimes, you may need to change payroll solution or your employee's Payroll IDs part way through a financial year.
There are important steps you need to take to ensure your employees income statements are accurate and their income is not overstated.
A common mistake when moving payroll solutions part way through a financial year and is bringing YTD amounts into your new solution and forgetting to either zero out amounts in your old software or, advising the ATO of your previous BMS ID if your software offers this functionality.