To help you prepare for the new financial year, I have laid out five simple steps to follow to make your start to STP reporting a breeze.
Step 1: Check employee details are complete and accurate
This may sound self-evident but not having the correct employee information is likely to cause the greatest number of issues when reporting.
The most critical attribute the ATO needs to link pay information back to an employee is a full and valid TFN. If the TFN supplied is incorrect, then the ATO will use the following details to identify your employees;
- Full name
- Residential address
- Date of birth
A full review of employee details before STP comes into effect is unlikely to be feasible unless you have a small team. Therefore, one simple task could be to make sure each staff member has a complete TFN assigned to their Master Record.
This can be assessed fairly easily by running a report through your payroll software. For example, through Definitiv, you can review TFN and the above information, all in the one Employee Listing Report.
Step 2: Correctly map pay items for ATO purposes
This step is straightforward and as the ATO’s requirements haven’t changed with the introduction of STP, your pay items should already be set up correctly. However, if you have added new Pay Items recently, make sure they have been accurately categorised for ATO purposes.
Step 3: Advise your staff to create a myGov account
It is essential your employees sign up and create their own myGov account. myGov is an Australian Government initiative and allows individuals to access their online government services, such as the ATO.
As soon as your company starts to report through STP, employees will need a myGov account to access their pay and tax information.
Step 4: Inform staff payment summaries will no longer be issued
To make things simple and straightforward, this step can be combined with step 3. As soon as STP comes into effect, Payment Summaries will no longer be a legal requirement and employers will not need to supply them to staff.
This is the main reason why your staff need to have a myGov account. With STP, as you are reporting directly to the ATO, once you have finalised the payroll at end of financial year, employees will have direct access to their income tax information through their myGov account.
If you still want to offer your staff a Payment Summary alternative, speak directly with your payroll software provider to find out if they are offering an alternative solution once Payment Summaries are eliminated.
To help with the transition, Definitiv will be making “Annual Statements” available in place of Payment or ETP Summaries. The Annual Statements will be made accessible to employees through their Definitiv account once the payroll has been finalised with the ATO at the end of the financial year.
Step 5: Start reporting early
Depending on when your payroll software provider is STP ready, try and start reporting before 1st July. Definitiv will be ready for STP reporting by mid-May 2018 and we have encouraged all our customers to get onboard early.
If you can report early, this will provide you and your team the perfect opportunity to iron out any bumps in the road before 1st July commencement date.
By getting a jumpstart on STP reporting, it will enable you to pick up any concerns addressed in steps 1 and 2. Plus, once the new financial year starts, you can just sit back and relax knowing that you are STP ready.
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By Roy Mellon, Chief Executive, Definitiv Group
The views of the author and those who provided the responses to the comments posted on the Knowledge Centre are not necessarily the views of the Sunsuper Board. While Sunsuper attempts to make a wide range of information available via the Knowledge Centre it may not cover all the options available to you. We’ve put this information together as general information only and as such it doesn’t take into account your personal financial objectives, situation or needs. You should get professional advice before relying on this information.