If you haven't already started reporting, you will need to determine how you will report through STP:
- If you use payroll software, your DSP will let you know how they offer STP reporting.
- You can choose a payroll solution that offers STP reporting if you don't currently have one, or if your current payroll solution will not be STP-enabled.
- You can ask a registered tax or BAS agent to report through STP for you.
- You can use a payroll service provider to report for you – they must be a registered agent to lodge on your behalf.
Before you start reporting through STP, you should review your current payroll processes.
Clean up any anomalies, in particular errors which may be detected through current processes such as issuing payment summaries or a payment summary annual report at the end of the financial year.
You should also check that:
- your employees' information is accurate, including their names, addresses and dates of birth
- you are addressing overpayments, calculating super and paying employees correctly.
The STP pay event file is an approved form. That means we require an authorised person to declare the information being submitted is true and correct. This declaration must be made by the person submitting the pay event file.
You will need to declare the STP data you are reporting is true and correct each time you submit a pay event or an update event. There will be a declaration in your STP-enabled software to do this.
You must have a standard process in place to verify your data is true and correct. This is a similar process to the assurance you may currently run to reconcile your bank file before you pay your employees.
While you must ensure you report accurate data at the time of your payroll event, you can make corrections in your next STP report.
Make sure you have internal authorisations in place before you lodge your first STP report.
Where this person is not the public officer, you need to make sure the appropriate delegation is in place. The person may need to be added as an authorised contact in Online services for business or Online services for agents if they will be interacting with us about STP matters.
If you are using a registered tax or BAS agent to lodge your STP reports on your behalf, you must authorise them so that they are linked to your account as an STP intermediary. You will also need to provide your registered tax or BAS agent with written authorisation to lodge a pay event on your behalf before each submission.
Your DSP will let you know how your software will send your STP files to the ATO.
They will also let you know if you need to use to lodge your reports.
Find out about:
- What you need to report
- Accessing online services with myGov ID and RAM
- Registered agents providing a payroll service
Your payroll solution will generate your STP report for your pay cycle by 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 YTD amounts you have reported to a different combination of these things (for example, because you have changed to a different payroll solution), you need to tell us.
If you don’t tell us, your employees will see duplicate income statements. It also means you're reporting more than your true PAYG withholding liability.
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 once.
Some payroll solutions will assign the BMS ID for you and others may allow you to nominate your own BMS ID. Your digital service provider can advise you about this.
You need to tell us if you change payroll solution 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 also occur when you are changing payroll solutions.
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 multiple income statements. 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/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/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.
The way you tell us about these changes in STP Phase 1 reporting is to use the zeroing out method.
You should use the zeroing out method if:
- your previous software provides this functionality
- you still have access to your previous software
- you are correcting an incorrect combination of ABN and 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 not able to use the zeroing out method, phone us on 13 28 66.