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  • Transitioning to Single Touch Payroll

    While some employers will start reporting through Single Touch Payroll (STP) from 1 July 2018, many employers will have a deferred start date. This may be because their software is not ready, or for other circumstances beyond their control.

    Employers who are granted a deferral will start reporting during the financial year, rather than on the first pay after 1 July. Refer to our information on deferrals.

    Your digital service provider (DSP) will give you information to support you when you transition to STP reporting. They will let you know which of the following methods to use:

    • Provide an opening year-to-date balance for all employees (active, inactive and terminated) in an update event.
    • Report year-to-date balances for all employees (active, inactive and terminated) in your first pay event.
    • Report year-to-date amounts for employees through a STP pay event and year-to-date amounts for inactive and terminated employees in a later update event which must be lodged by 14 July or the deferred due date.
    • Report the current year-to-date balances for the employees included in your first pay event. Give payment summaries to terminated and inactive employees and lodge a PAYG payment summary annual report to cover the payments you made before your first STP pay event.
    • Start your STP reporting with zero year-to-date balances and give payment summaries to all of your employees (current, inactive and terminated). Lodge a PAYG payment summary annual report for payments you made before your first STP pay event.

    Changing payroll solutions during a financial year

    If you start reporting through one STP solution and change to another during a financial year, you must transition correctly to make sure the information pre-filled into your employees' income tax return is accurate.

    There are three options to transition to a new payroll solution during a financial year:

    1. Migrate your year-to-date employee information to the new payroll solution. You will need to zero the employee year-to-date values from the old payroll solution through an update event to prevent duplicate information being displayed.
    2. If you do not migrate year-to-date employee information to the new payroll solution you can start reporting your employee year-to-date amounts from zero. You will need to finalise the employee information reported under the original payroll solution.
    3. Migrate your year-to-date employee information to the new payroll solution and use the original BMS identifier in future pay event reporting.

    Example: changing payroll solutions during a financial year

    Vandalay Industries decides to change its payroll solution as the business is growing. Vandalay Industries will start using the new payroll solution from 1 September 2019. It will be unable to transfer employee payroll data from the old payroll solution to the new one. Vandalay Industries needs to finalise the employee information in the last pay event submitted using the old payroll solution.

    At the end of the financial year, the employees of Vandalay Industries will have two sets of information from Vandalay Industries pre-filled into their income tax return – one for the period 1 July 2019 to 31 August 2019 and another for the period 1 September 2019 to 30 June 2020.

    End of example
    Last modified: 04 Jun 2018QC 54550