The introduction of Single Touch Payroll (STP) has changed the year end processes for both employers and employees. Payment Summaries (or Group Certificates) are now a thing of the past, with income statements replacing these. Here’s what it means for both employers and employees:
Employers no longer need to provide payment summaries to your employees or lodge a payment summary annual report with the ATO. STP replaces this need as information that is reported on these forms have already been reported to the ATO when you file your pays.
Submitting an STP Finalisation is easy and XERO have provided some easy to follow instructions for this: https://central.xero.com/s/article/Finalise-Single-Touch-Payroll-data
We recommend that you let your employees know that they will no longer be receiving a payment summary. Once the STP Finalisation has been submitted, we should advise your employees that the income statement is ‘tax ready’ and that they can proceed with preparing their 2020 income tax returns.
For the 2020 financial year, the finalisation declaration deadline is:
- 31 July if you employ 19 or fewer employees
- 14 July for businesses with 20 or more employees
Instead of receiving payment summaries, employees will find their year-end income information on ATOs Online Services – being either MyGov if they prepare their return themselves; or through the Tax Agent Portal if they have an accountant prepare them.
Once you have been advised by your employer that your income statement will display as ‘tax ready’, meaning your tax return is ready to complete.
As your registered tax agent, we have access to your income summary from ATOs Online Services. So the good news for you is that there is no longer a need to – provided your employer has submitted the STP Finalisation.
If your income statement doesn’t not display as ‘tax ready’ by the due dates above, we recommend contacting your employer to discuss this further.
Please don’t hesitate to contact our office on 02 9531 0922 if you have any queries regarding this new process.