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Single Touch Payroll is here: Your top queries answered

Posted 3 months ago in Advisors by Mel Arrold
Posted by Mel Arrold

We’re fresh into the new financial year, and there’s change afoot – as of 1 July, Single Touch Payroll (STP) legislation has kicked in for all employers across Australia. 

An ATO initiative to enable real time digital salary reporting, STP means employers are now required to report salaries and wages, PAYG withholding, and superannuation information, each time they pay their employees. There are multiple changes for everyone to get their heads around. But rest assured, the information is out there. In fact, we’ve gone ahead and gathered it all together for you.

The Xero team is revisiting some of the most commonly asked questions from our community – and connecting you with the answers and resources you need to stay on top of all things STP.

Why can’t I produce payment summaries anymore?

STP removes the requirement for payment summaries altogether –  a change that may take some getting used to. Instead, the ATO will now make this information directly available to employees online through their individual myGov accounts, in what is called an ‘income statement’.

Completing the STP opt in process within Xero connects your business with the ATO and enables STP reporting. The date by which you’ve opted in to STP will determine how you report payroll information to the ATO for your year end payroll requirements. If you opt in to STP after 1 July 2019, payment summaries can still be produced for FY19 and the years prior. However, if you opted in before 1 July 2019, you can no longer produce payment summaries (you can still access those from prior to your opt in date) – this is in order to prevent duplicate reporting of employee information to the ATO.

Remember, you don’t need to complete the STP finalisation process before the first pay run of this year – you have until 31 July for the 2018/2019 financial year. 

Where can I find out more? 

Advisors and business owners:

Employees:

What does it mean if I opted in before 1 July 2019? 

Once the STP opt in process has been completed, your business should be filing pay runs to the ATO on or before the payment date of each pay run. If you’ve opted in, but haven’t been filing any pay runs since you did so, there’s no need for concern. During the first year, the ATO has said they will not pursue penalties when businesses are making the effort to do their best to comply with the law. If you have not yet done so, you simply need to go ahead and file your last pay run of the financial year.

When you have opted in to STP, payroll year end occurs within your software – and there is no more paperwork or processes happening outside of your payroll system (STP will prefill all of your employees’ tax return information). All you need to do is file your last pay run and complete your STP finalisation, as this will give the required end of year information to the ATO. 

Again, you have until 31 July to complete STP finalisation for the 2018/2019 financial year.

How do my employees access their end of year figures for their tax return? 

Employees can find their income statement within their myGov account – that’s everything they need to complete their tax return. They will be able to view this information online and also print a tax friendly report called tax print that includes all details. 

Where can I find out more? 

Employees:

What resources can I give employees to teach them how to use myGov?

One of the key changes that employees may notice as part of the transition to STP is that payment summaries will no longer be issued at the end of the financial year. Instead, the ATO will make information reported by an employer directly available to an employee online through their individual myGov account. 

The ATO has provided the following information to help employees understand how to use and navigate myGov:

Is it true that the filing status can take up to 72 hours to update from the ATO? 

That’s correct. The ATO references that it can take up to 72 hours to process this information for you. If, for example, you have filed a pay run but it is marked as ‘Pending’ rather than ‘Filed’, this means that it is waiting for a response from the ATO. 

However, just because one of your filings is pending a response from the ATO, it doesn’t prevent you from filing another pay run or completing an STP finalisation. For example, if you process and file your last pay run for the financial year and it has a status of ‘Pending’; you don’t have to wait until that status changes to ‘Filed’ before you do your STP finalisation.

Where can I find out more? 

Advisors and business owners:

  • The ATO references its 72 hour process time in this factsheet: Get ready for Single Touch Payroll
  • If you are waiting for an extended period of time, it may be worth checking the SBR system status in case the ATO is experiencing any system issues that are resulting in longer than usual response times.  

Can I become STP compliant during my Xero trial period?

It isn’t possible to become STP compliant during your free Xero trail period. This is because connection to the ATO is only enabled once you have begun paying for your subscription. As soon as you get started with your subscription, you’ll be able to complete the STP opt in process and set up direct reporting to the ATO.

Where can I find out more?

  • Learn how to set up and use the STP feature within Xero.

What other resources are available?

While STP is a change for many small businesses and their trusted advisors, all the information you need is out there. In addition to our Single Touch Payroll homepage, you can:

28 comments

Donald Hellyer
July 6, 2019 at 7.21 am

I lodged my STP Final report on July 1 – 5 days ago, and it is still showing processing. This doesn’t seem right. Not sure if this is an ATO issue or a Xero issue. – Frustrating

Sophie Lamell in reply to Donald Hellyer Xero
July 8, 2019 at 11.24 am

Hi Donald, there aren’t any issues we’re aware of at the minute. However, we are seeing finalisations take longer than the expected 72 hours due to a higher than usual volume of submissions being sent to the ATO. We would recommend waiting a little longer than usual before expecting to see the status update.

Jonathan Glass
July 6, 2019 at 9.45 am

I have finalised my employees PAYE Payment Summaries and submitted them to the ATO via Xero. The Finalisation page on Xero shows that they are all ‘Processing’. Do I need to take any further action?

Sophie Lamell in reply to Jonathan Glass Xero
July 8, 2019 at 11.22 am

Hi Jonathan, this means that your submission is awaiting a response from the ATO. This can take up to 72 hours, however at the moment we’re seeing finalisation taking longer than expected due to high volume over at the ATO. The status of your submission will update once we receive a response from the ATO.

Trina Donkin
July 8, 2019 at 10.00 pm

Hi
I lodged all my STP finalisations over a week ago and still processing, what is xero doing in this regard. As employees are waiting for their payment summaries on my GOV

Trina

Sophie Lamell in reply to Trina Donkin Xero
July 12, 2019 at 6.18 pm

Hi Trina, when the STP finalisation is marked as ‘Pending’ this means it is waiting for a response from the ATO. As soon as this response is received, the filing will be sent through automatically. We’re aware of some instances where this is taking longer than expected to process due to some ATO performance issues. That being said, customers can expect this status to update soon as the ATO’s messaging service is now back up and running.

Nicole Van der Spek
July 9, 2019 at 10.28 am

So can I confirm that if I have lodged stp for last financial year there is nothing to submit?

Payment summary page says not filed with ATO lodgement status and only clickable button is preview. I cant publish, file now etc.

Is there an extra step I have missed or is this now complete?

Sophie Lamell in reply to Nicole Van der Spek Xero
July 15, 2019 at 11.22 am

Hi Nicole, it sounds as though you’ve opted into STP for the 2018/19 tax year. This means you’ll need to call the ATO and make the connection, then file your most recently posted pay run for the 2018/19 financial year (so that your year to date values are reported on the ATO’s end) and then complete STP finalisation.

If you finalise without posting a pay run first, the ATO won’t be expecting a finalisation file and as a result it will fail automatically.

Joy Turner
July 9, 2019 at 12.00 pm

I finalised my payroll on 3rd July and submitted them to the ATO. The finalisation page on Xero shows that they are all processing.
Is everything OK with what I have done?

Sophie Lamell in reply to Joy Turner Xero
July 12, 2019 at 6.15 pm

Hi Joy, when the STP finalisation is marked as ‘Pending’ this means it is waiting for a response from the ATO. As soon as this response is received, the filing will be sent through automatically. We’re aware of some instances where this is taking longer than expected to process due to some ATO performance issues. That being said, customers can expect this status to update soon as the ATO’s messaging service is now back up and running.

Leesa Miller
July 9, 2019 at 7.11 pm

Hello

I am trying to process my payment summaries however there is a separate ETP summary down the bottom that I can not view. When I click to finalise and send to the ATO the ETP amount and tax is not included in the gross and PAYG figures. Any idea how to fix this?

Sophie Lamell in reply to Leesa Miller Xero
July 12, 2019 at 6.12 pm

Hi Leesa, if you opted into STP prior to 1 July you will no longer be able to preview payment summaries. Instead, once you’ve finalised with STP – employees will now be able to view their ETP through their personal MyGov accounts.

Janet Spiers
July 10, 2019 at 1.59 am

Are employees able to access their payment summaries for the year 2018/2019 once showing finalised? It has been 3 working days now and they are saying only the 2017/2018 summary is showing.

Sophie Lamell in reply to Janet Spiers Xero
July 12, 2019 at 6.22 pm

Hi Janet, STP removes the requirement for payment summaries altogether – a change that may take some getting used to. However, once the STP finalisation has been accepted by the ATO, employees can log into the ATO portal (via MyGov) and go to Employment > Income Statement to review what’s been paid (this is similar to a payment summary).

Melissa
July 10, 2019 at 1.05 pm

Why are some employees finalised but not others, when they were all submitted at the same time?

Sophie Lamell in reply to Melissa Xero
July 15, 2019 at 5.59 pm

Hi Melissa, we just need a little more information about your situation so we can help out here. Please head to support.xero.com to raise a case.

Jo
July 12, 2019 at 2.41 pm

Hi,

My STP finalization is now filed with ATO, is there a way I could send a notification to employees like the one we had when sending a payslip?

Sophie Lamell in reply to Jo Xero
July 12, 2019 at 5.21 pm

Hi Jo, employees will get an email from the ATO advising them that their income statement is now tax ready, and they can start their tax return process.

Toni
July 13, 2019 at 9.39 pm

HI, I need to correct 4 payruns from through the year as I has incorrectly set up an Earnings as an allowance. I have now set up a correct earnings as ordinary time earnings. Now I need to revert the payruns which have the incorrect one so I can correct it, however I get the message “Due to STP regulations only the latest pay run per calandar can be reverted to draft status”. Now I have no idea how to correct this. please help

Sophie Lamell in reply to Toni Xero
July 15, 2019 at 12.07 pm

Hi Toni, if you have a mistake that you need to fix quickly, you can simply process an unscheduled pay run to reverse the values and then file it with STP. To do this:

1. Fix the mistake in an unscheduled pay run.

2. To file the pay run with STP, click File, then click File now.

3. Pay your employees if applicable.

Check out Xero Central for more information on processing an unscheduled pay run: https://central.xero.com/s/article/Adjust-previous-payroll-payments-AU

Olaoluwa Michael
July 16, 2019 at 7.06 pm

Hi
I have two jobs. One of my employers is not using STP so I was sent Payment summary and the other employer is using STP which appeared on myGov/ATO as “ready”. Please how do I consolidate the two for my tax return?

Sophie Lamell in reply to Olaoluwa Michael Xero
July 17, 2019 at 12.37 pm

Hi Michael, income from multiple employers (whether reported via STP or Payment Summary) will be pre-filled into your tax return. This means that if you have an agent do your return, they will automatically have all the information needed. Likewise, if you do it yourself through myGov the information will automatically be there.

Jo
July 19, 2019 at 1.49 pm

We opted into STP during 2018/2019 financial year so I went to run “Finalise” and ticked the button to include Previous Employees that left during that year, but the dates that come up say include employees that left between April 2018 to March 2019 but we only opted into STP the last 2 payruns of June 2019. Will it include any that left between April 2019 and June 2019??

Sophie Lamell in reply to Jo Xero
July 22, 2019 at 12.44 pm

Hi Jo, any of your employees who left between 1 July 2018 and 30 June 2019 will be included – you just need to tick the final flag for all employees before submission. The ability to include those who left between 1 April 2018 and 30 June 2018 is so that any RFBAs (Reportable Fringe Benefit Amounts) for those employees can be included in 2018-2019 STP finalisations.

Alison
July 26, 2019 at 4.48 pm

Submission errors
Transmission Errors
CMN.ATO.PAYEVNT.EM92168 – Your finalisation for the financial year was declined because no pay runs have been filed during that year. Please file a pay run for the financial year of the finalisation and confirm it’s success before trying again.

What does this message mean, i have been using xero for payroll since the business commenced 3 years ago, so i was told i didnt need to enter any opening balances when i recently opted in to STP?

I have trying to finalise the end of year but it keeps failing with this error, how can i fix it when there are no more pay runs to complete for 18/19 year?

Sophie Thomas
August 1, 2019 at 12.02 pm

Hi, I opted in to file STP for a client (as tax agent), but need to change this so that the client can do the STP filing.
How do I change settings so that the client can opt in to lodge? Thanks,

Sophie Lamell in reply to Sophie Thomas Xero
August 2, 2019 at 3.07 pm

Hi Sophie, we’d recommend your client goes through the opt in process as well and connects to the ATO using the SSID and ABN provided in the ‘Finish’ screen of the Single Touch Payroll setting. Alternatively, if you’d like to do this on their behalf, you can select the organisation’s name from the ‘File STP as’ field and this will generate their SSID and ABN, instead of your own. You can then call the ATO and connect using the organisation’s information.

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