Moving to STP Phase 2 after the STP Phase 1 shutdown

There are many things that won't change under STP Phase 2, like:

• how and when you lodge your STP reports

• the types of payments you report

• your tax and super obligations

• end of year finalisation.

You'll need to enter some additional payroll details

To report successfully under STP Phase 2, the ATO require some additional employee and payroll details to be entered into MYOB. You'll be guided to enter this information when you first set up STP or when you make the move from STP Phase 1.

• New ATO reporting categories
  ATO reporting categories help the ATO classify the wage, deduction and superannuation payments in your employees' pays. For STP Phase 2, there are some updated and new ATO reporting categories to better classify your employee payments. This includes some new ATO reporting categories like Overtime and Bonuses and commissions that might previously have been reported as Gross payments. Similarly, leave payments were previously reported as gross payments, but now they have their own, more specific ATO reporting categories. Learn more about assigning ATO reporting categories.

• Income Type and Country of origin
  The ATO need to know what type of income you'll be paying each of your employees. For a lot of employees this would typically be Salary and wages, but other choices include Closely held payees, Labour hire, or Seasonal worker program. If you choose Working holiday maker, you'll also need to choose the employee's Country of origin. You'll find the Income type field via Card File > Cards List > Employee tab > open an employee's card > Payroll Details tab > Taxes tab > Income Type.

  

  
  

• Lump sum E payments need the financial year they relate to
  If you've paid a lump sum E payment (an amount of back payment that accrued, or was payable, more than 12 months before the date of payment and is $1200 or more), you'll need to advise the ATO which financial year the payment relates to. For all the details, see this help topic.

Some of your payroll processes will change (for the better!)

• Tax file number declarations
  Under STP Phase 2, when a new employee starts working for you, you won't have to send the ATO a tax file number declaration. Instead, the ATO will be provided all the required information when you report the employee's first pay run via STP. You'll find the Tax File Number field via Card File > Cards List > Employee tab > open an employee's card > Payroll Details tab > Taxes tab > Tax File Number.

• Termination reason
  When you process a final pay for an employee who's leaving your business and you report this termination through the STP reporting centre, you'll need to select the Termination reason. This is now a requirement for both the ATO and Services Australia. Learn more about terminating an employee in Single Touch Payroll reporting.

Your end-of-year reports are clearer

After moving to STP Phase 2, your end of year reports will reflect STP Phase 2 information (Payroll command centre > Payroll Reporting > EOFY finalisation tab).

• The YTD verification report lists the new ATO reporting categories. In STP Phase 1 this report showed the aggregated gross wages, but it now shows the disaggregated values.

• The Summary of Payments report (accessible by clicking the ellipsis  button for an employee > View summary report (PDF)) only lists payroll categories that have been used for the employee in that payroll year. Previously all of the employee's payroll categories were listed, even those with $0.00 values.

1. Go to the Payroll command centre and click Payroll Reporting.

2. Click Payroll Reporting Centre.

   

3. If prompted, sign in using your MYOB account details (email address and password).

4. Click the the EOFY Finalisation tab.

5. Choose the Payroll year. The Gross Payments (YTD) and PAYG withholding (YTD) values are the total amounts sent to the ATO for all your employees.

6. Click YTD verification report.

   

   The report displays as a PDF. Take note of the total salary and wages YTD amount. Here's an example:

   

What am I looking at?

• This report shows the total of all ATO reporting category amounts sent to the ATO for all employees.

• The Reconciliation to Payroll section is not sent to the ATO. It shows total gross wages which you'll also see in the Payroll Summary report in AccountRight. This amount will differ from the total gross wages reported to the ATO, as it doesn’t include Allowances, CDEP, Foreign Income, ETP components (not ETP Tax), Lump Sum values or any additional reimbursable/employee expenses.

• The ATO Reporting Category section lists the things that have been submitted to the ATO.

• The Total payments (in the ATO Reporting Category section) doesn't include allowances. This amount should be the same as what's shown in your Payroll Summary report in AccountRight, minus any allowances or the other pay components which are listed in the Reconciliation to Payroll section.

• An employee's reportable fringe benefit amounts are reported to the ATO when you finalise, so these won't display on the YTD verification report until after you've completed the finalisation.

1. In AccountRight, go to the Reports menu and choose Index to Reports.

2. Click the Payroll tab on the left.

3. Under Payroll Categories, click the Payroll Summary report.

4. Filter the report to show Year-to-Date for This Year, and dated from 1 July to 30 June.

   

5. Click Display Report and check the YTD total for wages. Here's our example:

   

After you've run the above reports, compare the YTD total wage amounts on both. If they match (like in our example), you're ready to finalise.

If the reports don't match

Here are some things to check.

Check your ATO reporting categories

Make sure you've assigned an ATO reporting category to each of your payroll categories. The easiest way to check if anything is missing is to let AccountRight do it for you.

1. Go to the Payroll command centre and click Payroll Reporting.

2. Click Check Payroll Details.

   

   AccountRight will let you know if there are any payroll categories that need an ATO reporting category assigned—like this example:

   

3. If any payroll categories are listed:

   1. Click the zoom arrow to open the payroll category.

   2. Assign the applicable ATO Reporting Category. For help choosing the right one, see Assign ATO reporting categories for Single Touch Payroll reporting or speak to your accounting advisor.

   3. Click OK.

   4. Back on the Check Payroll Details window, click Check Payroll Details to run the check again.

4. If you add or change the ATO reporting category in a payroll category, send an update event to the ATO as described below.

   Use Find transactions to identify employees who have been paid a specific payroll category during the payroll year (Payroll command centre > Find transactions > Search by Payroll Category > choose the payroll category > enter dates from 1 July to 30 June).

Once all payroll categories are assigned an ATO reporting category, run the YTD verification and Payroll Summary reports again (as we did above) to ensure they match. If they do, you're ready to finalise. Otherwise, check the reported wage values for each employee as shown below to narrow down where your issue might be.

Check reported wage values for individual employees

There are two reports you (or your accounting advisor) can use to check the amounts paid to individual employees for the payroll year.

• In AccountRight, run the  Employee Payroll Register Detail report (Reports menu > Index to Reports > Payroll tab > Register Detail).

• In the Payroll Reporting Centre, click the ellipsis  button for an employee and choose Download report(PDF) or View summary report (PDF). This report shows a summary of all ATO reporting category amounts sent to the ATO for an employee (gross payments, PAYG withholding, allowances, etc.).

 Here's what these reports show:

To ensure the latest year-to-date amounts are sent to the ATO for an employee, you can send an update event to the ATO as described in the FAQs below.

After the move, you'll notice these changes:

• When you access the STP reporting centre, it'll open in the web browser version of AccountRight (Payroll command centre > Payroll Reporting > Payroll Reporting Centre) and you'll see a label showing you're reporting on STP Phase 2.

  

• When terminating an employee in the STP reporting centre, you'll choose a Termination reason.

  

  
  

• There's a new Send update event button in the STP reporting centre to send your employees' latest year-to-date payroll totals to the ATO. Previously you could only do this by recording a zero dollar ($0) pay.

  

When you move from STP Phase 1 to STP Phase 2, the following fields are checked for missing information.

You'll complete the move to STP Phase 2 online (via a web browser) so you can integrate with the ATO's online services. This is only possible if your company file is online.

If your company file is offline (saved on your computer or a network server), you'll need to put your company file online to move to STP Phase 2. Having your file online is included with your subscription, so there's no extra cost.