Off-Cycle Payruns and corrections
Payrun Corrections (Overpayments & Underpayments)
Corrections to an employees pay such as overpayments and underpayments are usually made via the next scheduled pay-cycle or via on off-cycle payrun.
These will be reported to STP in the PE that is submitted for that payrun.
If made in this way, the adjusted values will be reflected in the W1 and W2 labels on your BAS.
You also have the option of using an STP UE however UE's do not reflect the adjustment amounts in the W1 and W2 labels on the BAS.
Paying Out of Cycle
A payment for an individual employee out of the usual pay cycle may include a bonus, commission, payment in advance or a back payment.
These do not need to be reported via a separate STP PE, but can be included in the next regular PE.
However, if you wish, you may report this via a separate PE for that payrun.
Terminations
If the termination payment has been made as part of a normal scheduled pay cycle it will be reported in your PE submission for that payrun.
If the termination payment was made in an off-cycle payrun or adjustment, then you can either submit it via a PE for that payrun, or you can select the employee in an UE.
In either case, the employee YTD figures will be flagged as Finalized in the myGov employee portal.
ETP’s
ETP payments are submitted via the same methods as normal terminations as above.
The important point to note with ETP’s is where multiple related ETP payments are made in the same Financial Year.
If you have made multiple related ETP payments for the same employee in the same year then the ETP date in Ready Pay must be the same otherwise they will be treated as separate ETP payments by the ATO.
Correction to a previous Financial Year
Corrections to a previous financial year are submitted to STP by selecting the previous year in an UE for the relevant employees.
This process is outlined in the section Submitting an STP Update for one or more employees.
Reportable Employer Superannuation Contributions (RESC)
The method of reporting your Reportable Employer Superannuation Contributions (RESC) has not changed under STP.
If you were already reporting RESC under the previous ATO Annual Payment Summaries, then you do not need to change anything within your Ready Pay setup.
The RESC amounts will be reported as part of your normal STP PE and UE submissions.
Reportable Fringe Benefit / Exempt Foreign Income
The method of reporting your Reportable Fringe Benefit or Exempt Foreign Income has not changed under STP.
If you were already reporting FBT or Exempt Foreign Income under the previous ATO Annual Payment Summaries, then you do not need to change anything within your Ready Pay setup.
Reportable Fringe Benefit and Exempt Foreign Income amounts are reported as part of your normal PE submissions.
Finalizing a Financial Year
Finalization is the process to follow at the end of the financial year, which replaced the ATO Annual Payment Summary process.
An employer may make the declaration at any time during the financial year, or after the end of the financial year up to July 14.
You use the Finalize checkbox in an UE to indicate that no further processing is expected for the selected employees, typically for all employees for the selected financial Year.
This has the effect of indicating on the employee’s myGov portal that the published YTD figures are final.
IMPORTANT: Even if you have ‘Finalized’ a financial year, it is still possible to make further changes or adjustments to that year and then do another ‘Finalize’ UE.
Finalizing an Employee during the Financial Year
The process of entering a termination date against an employee, either in the employee screen or a payrun, will trigger the finalisation of that employee in the next STP PE or UE.
This process can be reversed simply by removing the termination date from the employee file.
Here is the ATO’s guidance on finalising your STP reporting: