I have been reporting STP during the financial year. Do I have to generate payment summaries?

In general, you will not be required to provide your employees with payment summaries for any  information you have reported through STP. To clarify, this also means you will not need to lodge a payment summary annual report with the ATO. For more information on EOFY processes for STP reporting, see our End of Year Guide 2019/2020 – Reporting STP.

Instead of receiving a payment summary, your employees will see information reported through STP via their myGov account. This information will be called an employment income statement. An ATO downloadable factsheet for employees can be accessed here.

Registered agents will also have access to this information through the Tax Agent Portal.

Employees who do not create a myGov account will need to contact the ATO call centre for a copy of the information reported through STP.

However, there may still be circumstances where you are required to generate payment summaries.

When do I have to generate payment summaries?

Any employee payments that were not reported through STP must be included on a payment summary and in a payment summary annual report. So what does this mean? There may be certain scenarios where certain employee payments have not been reported via STP. Some of these include (but are not limited to):

• Employee share schemes;
• Reportable Fringe Benefits Amount (RFBA);
• Reportable Employer Super Contributions (RESC); and/or 
• When transitioning from a previous payroll system.

Additionally, if you are exempt from reporting STP (ie a WPN holder or small employer with closely held employees) and so have chosen not to, you will need to issue payment summaries to these employees and lodge a payment summary annual report to the ATO.

Reportable Fringe Benefits Amount

Please note that this payroll software allows users to enter RFBA amount in STP events. Instructions on how to do this via an update event can be accessed here. We strongly recommend you use this functionality to report RFBA for the applicable employees otherwise you will be required to generate payment summaries for such employees as well as lodge a payment summary annual report with the ATO. 

Reportable Employer Super Contributions

Please note that this payroll software calculates RESC via the pay run if the employee has been set up correctly to automate such calculation. This is done via setting up a recurring deduction via the pay run inclusion functionality. Furthermore, any RESC recorded in a pay run will automatically be reported in STP events. If they have not been recorded in a pay run or set up incorrectly we strongly suggest fixing this and then lodging an update event to ensure RESC is reported correctly. This also eliminates the need to generate payment summaries. 

Transitioning from a previous payroll system

If a business moved to this payroll system during the financial year AND was not reporting STP in the previous payroll system AND did not being across year-to-date (YTD) values for the employees to this payroll system, then payment summaries will need to be generated for the payroll data recorded in the previous payroll system. Payment summaries will need to be generated in the previous payroll system. 

If a business moved to this payroll system during the financial year AND was not reporting STP in the previous payroll system AND did not bring across year-to-date (YTD) values for terminated employees to this payroll system, then payment summaries will need to be generated for the payroll data recorded in the previous payroll system for terminated employees only. Payment summaries will need to be generated in the previous payroll system.

You can avoid generating payment summaries for the above scenarios by transferring the YTD data for all employees from the previous payroll system to this payroll system and then lodging  an update event - this will then report correct YTD data for all employees. Once you then complete the finalisation process, you will not be required to generate payment summaries. 

What information do I include when generating payment summaries?

The golden rule here is that you only report information that has not been recorded via an STP event. Otherwise you will be reporting duplicate data to the ATO.

If you have any questions or feedback, please let us know via support@roubler.com.