Time to Prepare your 2022 Single Touch Payroll Finalisation
End of Financial Year is upon us, so it’s nearly that time to finalise your declaration for Single Touch Payroll. In this article, we will outline the key points and dates for you to keep top of mind for this essential step in wrapping up the payroll year.
When to declare by
There is no need to issue payment summaries to employees you have reported through Single Touch Payroll (STP) and you must complete the finalisation declaration by July 14th for these employees. If, like a lot of small-medium size businesses the team at Figure 8 Accounts work with in the Macarthur region you have a mixture of employees and closely held payees, you have until September 30th to make the declaration.
For small employers – i.e. those with fewer than 19 employees- that only pay closely held payees, you have until the payee’s income tax return date. These employers will need to liaise with the individual payee about the exact tax return due date.
What about Payees not reported through STP?
You may have some payees that have not been reported through STP. For these payees, you will still need to issue a payment summary for anyone not reported through STP. In addition, you will need to submit a Payment Summary Annual Report (PSAR) for any payments outside the STP System.
Once the STP finalisation has been sent off to the Australian Taxation Office, the employee’s information will be released in their myGov account, and will show as ‘tax ready’.
Our STP Payroll Finalisation Checklist
In order to efficiently finalise your data by July 14th, prepare as much as you possibly can now- it’s never too early to start. Things to consider are:
- Checking business details – Are all your business details like ABN, Registered name, address and authorised contact person all correct and up-to-date in your software?
- Check Employee details – The most essential information you should check is correct and up-to-date is the employees full name, date of birth, address and TFN. Be sure you have the necessary details for all current and any terminated employees from the last year.
- Check Terminated Employees – Review and double check that the correct termination date is recorded in your software and ensure any Employment Termination Payments (ETP’s) are coded correctly.
- Salary Sacrifice Payments – Be sure to review these payments to superannuation for Reportable Employer Superannuation Contributions (RESC) amounts.
- Reportable Fringe Benefit Taxes – Check to ensure whether there are any amounts that should be included. If you’re unsure, reach out to our team.
- Check Payroll Categories – Ensuring these are assigned to the correct ATO reporting category is essential – i.e. all ordinary earnings, loadings and penalties, allowances, commissions, bonuses, leave payments and termination payments.
- Reporting on unusual payments – For example, you may have payments made under a voluntary agreement for contractors or labour-hire arrangements. Be sure to check you’ve reported these correctly.
Finalising Single Touch Payroll
Before finalising your STP declaration, it’s imperative to verify the payroll figures first in order to reduce the chance for errors, and then having to re-issue at a later date. Note, the finalisation process is the same whether you are using STP Phase 1 reporting or Phase 2. You can analyze the payroll amounts for each employee once the payroll year is completed on the 30th June, at which time, you can cross-check against the numbers in your P & L accounts.
Still feeling a little mystified with the whole process? Need help reviewing and validating your payroll figures prior to finalising the data and lodging it with the ATO? Simply get in touch with our experienced team of accountants and bookkeepers at Figure 8 Accounts before end of payroll year is upon you!