What happens
Your payroll solution will generate your STP report for your pay cycle by Australian business number (ABN), branch and BMS ID. We use this combination of information, together with the Payroll IDs you report, to identify when we need to display a separate income statement to a taxpayer. We will display a separate income statement for each combination.
If you transfer the employee year-to-date (YTD) amounts you have reported to a different combination of these things (for example, because you have changed to a different payroll solution) you must notify us.
Not doing this can result in duplicate income statements for your employees and incorrect PAYG (pay as you go) withholding and superannuation reporting.
The way you notify us will depend on your software functionality. If you are unsure what options are available in your software, you should check with your provider.
Changing ABN or branch
If you are changing ABN or branch, you will need to finalise on your original ABN/Branch and commence from zero on your new ABN/Branch. Not doing so may overstate your employee’s income.
You should speak to your software provider about how this may impact your STP reporting as this can create unintended duplicates for your employees.
Closing your business
Before cancelling your ABN, you must bring all lodgment obligations up to date, including STP.
You need to:
- lodge an STP finalisation declaration for all employees
- finalise all STP before cancelling your
- PAYG withholding, GST and ABN registrations
- payroll software subscription.
If your entity no longer operates but keeps its ABN, you must still cancel PAYG withholding and GST, and lodge an STP finalisation declaration. If you are a sole trader, different requirements may apply.
Changing your payroll solution
Your STP-enabled payroll solution has a BMS ID that acts like a serial number to tell us which payroll solution sent the STP report. This is important because some payroll arrangements pay employees out of more than one payroll solution at the same time.
Some payroll solutions will assign the BMS ID for you and others may allow you to nominate your own BMS ID. Your BMS ID may change if you upgrade or downgrade your subscription with the same provider. Your digital service provider (DSP) can advise you about your BMS ID.
You need to tell us if you change payroll solution or product subscription and transfer YTD amounts if your payroll solution:
- assigns the BMS ID for you
- allows you to nominate a BMS ID and you choose to nominate a BMS ID that is different to your previous payroll solution.
If your payroll solution allows you to nominate your own BMS ID and you choose to use the same BMS ID as your previous payroll solution, you do not need to tell us. This is because there has been no change to the combination of ABN, branch and BMS ID in your STP reporting.
Changing your employees’ Payroll IDs
Each employee included in your STP report must have a Payroll ID for you to report their YTD amounts to us. If you change their Payroll ID and transfer their YTD amounts from their old Payroll ID, you need to tell us that you have transferred these amounts.
This may occur when you are changing payroll solutions. Other reasons Payroll IDs may change include promotions, name changes, retirement. Your DSP can advise you about Payroll ID functionality.
If you don't transfer employee YTD amounts, you don't need to tell us.
Changing payroll solutions or Payroll IDs without transferring YTD amounts
There may be circumstances where you change payroll solution but do not transfer your YTD amounts to the new solution.
If you do not transfer employee YTD amounts, you do not need to tell us about any changes.
We will display a new income statement for the new YTD amounts you report for the new combination of ABN, branch, BMS ID and Payroll ID that you report through STP.
This means that your employee will have more than one income statement. You must finalise your STP reporting for each combination of ABN, branch, BMS ID and Payroll ID for your employees, so that we can let your employees know when the information displayed in each of their income statements is tax ready.
You can finalise your STP reporting at any time during a financial year until 14 July. However, you should consider whether:
- your previous ABN or branch will still be active – you cannot finalise your STP reporting if the ABN or branch has been cancelled
- you will still have authorisation to report on behalf of your previous ABN or branch
- you will still have access to your previous payroll solution.
If you won't be able to finalise all your STP reporting at the end of the year or you don’t know whether you will be able to, you should finalise your STP reporting when you change your payroll solution or employees’ Payroll IDs.
Options for telling us about changes
Use one of the available methods below when you change your payroll solution or employees Payroll IDs.
Replacement of BMS ID or Payroll IDs
You should use the replacement method if:
- your software provides this functionality
- you know your previous BMS ID and/or your employees’ previous Payroll IDs
- you no longer have access to your previous software.
When using the replacement method, you should transfer your employee YTD amounts to your new payroll solution or to their new Payroll IDs and send us an update event which includes your previous BMS ID and/or your employees’ previous Payroll IDs. This will tell us to replace your employees’ old income statement with a new income statement.
You can only tell us your previous BMS ID or your employees’ previous Payroll ID in an update event. You cannot include them in a pay event.
Zeroing out
You should use the zeroing out method if:
- your previous software provides this functionality
- you still have access to your previous software
- your new DSP doesn’t offer the replacement method
- you are correcting an incorrect combination of ABN or branch in your STP reporting.
Follow these steps when using the zeroing out method:
- Before you transfer the YTD amounts to your new payroll solution or your employees’ new Payroll IDs, send us an update event that shows all YTD amounts for your employees as zero. This tells us that you are making changes and that we should stop displaying your employees’ current income statement.
- Transfer your employee YTD amounts to your new payroll solution or employee Payroll IDs and send us an STP report for your employees showing their transferred YTD amounts.
If you are unable to use these methods, phone 13 28 66.
For more information, see Correcting information reported through STP.