Just as you thought you’re all set to lodge your Single Touch Payroll (STP) report to the Australian Taxation Office (ATO), you have to remind yourself of strict compliance with the reporting requirements. In order for you to meet your STP obligations, we have highlighted these guidelines for employers:
- You are mandated to submit a report of a pay event to the ATO on or before the pay date. The report must consist of information for each employee with an amount subject to withholding paid in that regular pay cycle.
- The report must include the year-to-date values of gross salary, allowances, deductions and PAYG withholding for every employee included in that pay cycle.
- You are required to report year-to-date employer ordinary time earnings (OTE) amounts for each employee included in that pay cycle.
- Your report must include period gross salary and PAYG withholding for all employee payments in that pay cycle.
- Your report must include all payees’ tax file number (TFN) or Australian business number (ABN).
- A pay event must contain at least one employee record and can only include one record for each employee.
- You may lodge multiple pay event documents on the same day.
Reporting founded on your present business structure
Utilising one of a variety of STP solutions, STP reporting can be based on how your payroll is currently formed. The pay event should be set up at an ABN, a branch, or through a business management software identifier (BMS) ID level.
For PAYG withholding branches, they must report and pay PAYG withholding individually for each branch.
For Multiple payroll solutions, you can submit separate reports from each payroll solution. This will be classified by the payroll solution through a unique BMS ID.
Note: If there are changes to your business structure, the ABN and branch under which you have been creating your STP reporting, may also change. If this happens you are required to decide your STP reporting under the ABN or branch you have been generating for your STP reporting before you lose access to it. Begin your STP reporting under the new ABN or branch utilizing zero year-to-date employee amounts.
For multiple employee records under the same ABN or branch, you must report each payroll record of the employee using a rare payee payroll ID. These different payee payroll IDs will be considered as a unique record for STP reporting and must have different year-to-date amounts for each payee payroll ID.
Reporting out of the cycle
Aside from the regular pay cycle, business owners can make other payments to employees such as commissions, bonuses, or back payments. These types of payments fall under out-of-cycle reporting and may be reported by either lodging a pay event on or before the day you made the payment; including the out-of-cycle payment made to the employee in the succeeding regular pay event you lodge, or at the time the actual pay is calculated.
Employment termination payment
An employment termination payment (ETP) must be reported in a pay event on or before the payment date. If the payment is not part of your regular pay cycle, you may practice the same rules that of out-of-cycle payments.
If you pay multiple ETP on the same day, they must be labelled separately if the ETP type code is different.
If you pay ETP in multiple instalments, you should report each payment individually.
Reporting foreign employment income
Payments made to employees working overseas depends on various factors, such as the applicable tax treaties and the time in the foreign country.
If amounts are denied in a foreign country, payments to an employee posted to a foreign country are required to be reported as foreign employment income. If no amounts are denied for the foreign country, then payments to an employee should be reported as individual non-business payment types.
The employer must report payments made to employees posted in a foreign country throughout the year and make adjustments as mandated. The adjustments can be made throughout the year or at the end.
The employer is required to adhere to accounting for overseas tax instructions.
Reporting Death benefit ETP
If you make a payment for a death benefit ETP, you may report this payment via STP and make a finalisation declaration about this payment. In doing so, you will be excused from generating a payment summary and payment summary annual report.
You should report the estate beneficiary TFN if the employer has been provided with the details. The estate beneficiary could be an individual TFN where the beneficiary is a dependent or non-dependent.
If you make multiple ETP payments to the same beneficiary in the same financial year, you must submit a separate report for each payment.
