What transition options are available with STP reporting? | Payroll Platform

This article is relevant to any employer who starts reporting, from within this payroll system, STP events during the financial year either because:

• the employer has been granted a 'deferral' and so was not required to start reporting from 1 July, or
• a change of payroll system has occurred part way through the financial year
• a change of payroll system has occurred between financial years

Here we will provide you with options and instructions on how to commence reporting based on the relevant scenario.

Scenario 1: The employer was granted a deferral

Refer here to access the ATO's information on deferrals. This can only be authorised by the ATO and we cannot provide any information on whether an employer can defer STP reporting. To clarify, this payroll software has been ready for STP reporting from 1 July 2018 and, as such, employers will not be granted a deferral from the ATO for reasons pertaining to the software not being ready.

If a deferral has been granted, the employer will start reporting during the financial year rather than on the first pay after 1 July. In this instance, you will need to report your employees' year-to-date (YTD) data, via an update event, BEFORE you submit your first pay event, the reason for this is twofold:

Firstly, an update event includes ALL employees (ie. active and terminated) and is a summary of their YTD data. A pay event, on the other hand, will only include employees who had a payment processed in the pay run and so will exclude previously terminated employees and employees not paid in the pay run/period you are lodging.

Second, all events must be lodged with the ATO in chronological order. The update event must be lodged first to record the initial YTD data and then you can commence lodging pay events (after pay run finalisation).

So, in summary, the process here is:

1. Create an update event to report the employees' YTD data - instructions on how to do this can be found here.
2. Once the update event has been lodged successfully, process the first pay run after your deferral has ceased and lodge that pay event.  Instructions on how to do this can be found here.
3. Lodge a pay event for each pay run thereafter.  

Scenario 2: Changing payroll systems during the financial year

If an employer changes to a different payroll software during the financial year, the transition process will be dependent upon a couple of things -

• was the employer reporting STP from the previous software?
• if they were, will the employer use the same Business Management Software (BMS) ID from that previous software?
• does the employer want to migrate YTD figures to the new software?

The correct process here will ensure any information reported for STP will pre-fill the employee’s income statements at the ATO accurately.

Option 1

The employer has NOT been reporting STP from a previous system. If this is the case the process will be:

• import YTD figures (for both active and terminated employees) into the new payroll software using the opening balances feature
• create/lodge an update event
• continue to create/lodge pay events as normal

Option 2

The employer HAS been reporting STP from a previous system, wants to migrate YTD figures and use the original/previous BMS ID to report STP going forward. The process here will be:

• Change the BMS ID in this payroll system to that of the previous payroll system's BMS ID;
• Copy over the employees' payroll ID used in the previous payroll system to the STP Payroll ID field in this system. If you do not have access to the employees' payroll ID, you can ask the employee to access their MyGov account and follow these steps:
  1. Click on "employment"
  2. Click on "income statements"
  3. Click on the dropdown arrow
  4. Retrieve the "employee number" from there; 
• Import YTD figures into this payroll system using the opening balances feature;
• Lodge an update event to report the YTD totals imported. Alternatively you can just wait to lodge your first pay event as this will include the imported YTD totals for the employees within that pay run.

Detailed instructions on the first 2 steps of this process can be found here.

Option 3

The employer HAS been reporting STP from a previous system and wants to migrate YTD figures using the new BMS ID -

• Import YTD figures (for both active and terminated employees) from your old payroll into the new payroll software using the opening balances feature (NB. nothing to do with STP but Leave balances can also be transferred this way if you like)
• zero out the employee YTD values from the old BMS ID (previous payroll software) and then report this via an update event in the old system where you also tick the box "Mark as final" for each employee (this will notify the ATO that there will be no further payments for these employees from the old BMS ID)
• You can do an update event to report the YTD totals imported OR just continue to create/lodge pay events as normal as the first pay event will include (and update) the YTD totals anyway.  NB. if there are any employees in your payroll account that have been terminated in the current financial year you will definitely need to lodge an update event to lodge their YTD data, because they won't show up in any "current" pay events you lodge using this payroll system.

Option 4

The employer HAS been reporting STP from a previous system, does NOT want to migrate YTD figures and wants to use the new BMS ID -

• Use the ‘Mark as final’ option for all employees when lodging the last pay event in the previous system using the original BMS ID (this will notify the ATO that there will be no further payments for these employees from the old BMS ID)
• Do NOT import YTD earnings to the new system (you may need to import YTD figures for leave balances)
• There is no need for an update event in the new system, you can just start reporting STP from the first pay run (which will be the next consecutive pay period after the last one that was reported in the old system)

Scenario 3: Changing payroll systems "between" financial years

Finishing up with one payroll software provider at the end of one financial year and starting afresh with a new provider at the beginning of the new financial year is perfect timing because each financial year is "separate" at the ATO. 

Just make sure you have finalised your STP reporting for the old financial year in the previous payroll system, then you just need to add your employees and input leave balances into the new payroll software, do this using the opening balances feature - remember, there's no need to input any earnings details into opening balances because all employee earnings are reset, ie. start from $0, each 1 July. Then you can just start reporting STP from the first pay run (which will be the next consecutive pay period after the last one that was reported in the old system).

There is no need to continue using the BMS ID and employee ID/STP Payroll ID from the previous provider, as it's a fresh/new financial year you can just use the BMS ID and employee ID/STP Payroll ID created automatically when you turn on STP in your new payroll account and new employee records are created. However, you must let the ATO know that you've changed payroll providers, detailed instructions on how to do that are here. 

Our comprehensive STP reporting guide can be accessed here.

If you have any questions or feedback, please let us know via support@yourpayroll.com.au.

Please sign in to leave a comment.