Bookkeeping for Single Touch Payroll (STP) Number of Employees STP. Reconcile before STP

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1 Bookkeeping f Single Touch Payroll (STP) Key Terms and Issues Number of Employees EOY Final PayEvent + MyGov PayEvent + BAS + Super STP Reconcile befe STP Software Ready + Deferral Payroll Setup Befe Implementing STP Engage with the Employer Ensure that you are engaged by your employer to provide STP transition and operational assistance Ensure they are aware of this change to payroll (provide them with the ICB Business Infmation Sheet) Your engagement letter needs an additional clause about your involvement and to establish the ongoing communication from the employer to you, that complies with the employer's obligations under STP ICB engagement letter updates f STP are available from ICB member resources. Who is Allowed to do STP? The TPB has confirmed that STP repting is considered a BAS Service therefe BAS Agents and Tax Agents may perfm this repting on behalf of their clients. The employer their authised employee may also rept on behalf of the employer. A bookkeeper a payroll service provider who is not a registered Agent may not liaise with the ATO (therefe can't lodge repts) directly on behalf of the client. They may however have a different service where the employer is making the declaration and the service provider technically facilitates the lodgement. Can I Run Two Different Payroll Systems f My Business? Yes. Each payroll system will have a unique BMSID (Business Management System Identifier). Each BMS can submit pay events f the same ABN and even the same employee (if they are paid by both) and can be Finalised in both. The ATO will accept two final sets of data from the same employer. PAY- Bookkeeping f Single Touch Payroll (May 2018) The Institute of Certified Bookkeepers Page 1

2 How Do I Swap Payroll Systems? Each payroll system will have a unique BMS ID. If you swap systems, then either Zero out all the balances in the old system and send an update event to the ATO which will Zero out all the employee balances from that system, and then Bring the YTD values into the new system and either send an update to bring the ATO upto-date from the new BMS ID send a pay event which will provide the infmation. Finalise the YTD balance in the old system, and then Start from zero in the new system. Reconcile Wages ICB recommends that befe implementing STP that a full reconciliation of wages is done, the same as you would do f end of year reconciliations. This is to ensure you capture any anomalies and to understand the YTD wages sent to ATO. Refer to ICB Resource Reconcile Wages and PAYGW Implementing STP How Do I Start? Create a list of your clients who have 20 me employees who are required to do STP STP is all payroll software based so all details should already be in the software There is no (current) ATO ptal lodgement ability There is no registration process, just start lodging via payroll software When Do I Start? It depends Businesses with 20+ employees need to know what they are doing befe 1 July 2018 Other businesses must start by 1 July 2019 but may start any time from now if they wish Payroll Software Setup Payroll Software Deferral Your software provider may advise you that they have been granted a deferral You need their deferral infmation to provide it to the ATO if the ATO ask, then you don't need to do anything until the software is ready If you need a longer deferral you will need to lodge your own deferral application not available today Exemptions exist f very limited cases refer ICB STP Resources Payroll Software Setup Ensure all the employee details in the software are complete Full names and addresses Date of birth TFN PAY- Bookkeeping f Single Touch Payroll (May 2018) The Institute of Certified Bookkeepers Page 2

3 Review how payroll is set up to ensure your system captures the relevant infmation f each employee each pay run: Gross Salary & Wages Allowances (Under STP allowances are to be grouped and repted by categy, see below) Deductions (STP allows the repting of each type of deduction) PAYG Tax withheld The amount of Superannuation accrued Could be just the SG component, Could be all the super accrued as a result of the pay run What Do I Do When I Start? Your software should be connected to the ATO: Via the ATO Access Manager a connection to your software company will require you to enter in the Software code (Cloud Authentication using the Device Auskey) refer to ICB Resources Your software may require you to interact using the business Auskey in the business payroll software (a direct connection) Your software may create an STP file which will require you to arrange another service enabling lodgement ICB will advise when we are aware of a valid service f you. You may have to expt a rept from one software and impt it ( rekey) it into another, i.e., GovRepts PAY- Bookkeeping f Single Touch Payroll (May 2018) The Institute of Certified Bookkeepers Page 3

4 You must follow any transition steps that your software requires in der f you to ensure your existing payroll system will provide the right data in the right fields when the infmation is being submitted to the ATO. These steps may include: Mapping of payroll fields into STP fields User authity set up the system so that only the authised persons can make the lodgement. Agents are to be identified in the system You will need an internet connection at the time of submission. Note you may start at any time during the year You may start earlier than required, subject to your software readiness It is recommended that you do an update f all employees that have been paid within the financial year so far, so that the ATO has infmation f everybody. Note: a pay event an update provides employee YTD figures Payday/Pay Event and BAS Each Payday Run your nmal business process f the pay Obtain a declaration authisation from the employer (refer ICB Resources), either when they provide you with the infmation to run the pays, when you have completed the pays and they sign off (our recommendation) Your software should send the STP infmation as part of the pay process, create the STP file to be sent, allow you to obtain a rept from the system f alternate lodgement Ensure the infmation is being sent (we expect you should simply send each time you do a pay run) your software should provide a submission date and time stamp as well as recding a receipt number from the ATO. Crecting a Pay The employers' payroll system is the source of truth Ensure you meet your Fair Wk requirements f payslips and employee obligations Crect the pay in the pay system then either: Send an update event to the ATO that will update the ATO data f that employee, Wait until next pay run f that employee (as it will then provide the ATO with the crected YTD values) Superannuation and STP Under STP superannuation guarantee accrued will be repted to the ATO each pay event. The superannuation funds are then required to rept to the ATO superannuation payments made by employers. This process will highlight to the ATO employers not paying are late paying employees' super. Currently this requirement is not law, but the superannuation funds are aware of the required change. PAY- Bookkeeping f Single Touch Payroll (May 2018) The Institute of Certified Bookkeepers Page 4

5 BAS Time Eventually the ATO may be providing W1 and W2 as prefill into the BAS both monthly and quarterly. We are not there yet. The concept below won't change. Complete the W1 & W2 fields in the same manner as befe STP. Specifically, the W1 & W2 you complete in the BAS should be based on the current crected values that are in the employer's payroll system. (When the ATO provide prefill numbers, the lodged BAS numbers need to be checked and altered to agree with the employer's payroll system.) If I Crect Prefill BAS What Else Do I Have to Do? Nothing. If W1 and/ W2 need to be changed on the BAS, change them. There is no requirement to change previously lodged STP repts. The employee values are YTD and therefe any changes will be picked up in the next pay event if you send an update event. The BAS is the official fm that changes the W1 & W2 fields. End of Year Payment Summary Payment Summary Time Changes to Final Pay Event You should complete the same end of year checks and reconciliation process, as if you were preparing payment summaries When crectly reconciled, using your software you will send a Final set of data to the ATO f each employee. (This replaces lodging the PSAR/empdupe file and Payment Summaries with the ATO) Check that every employee paid during the year has been set to Final and that message gets sent to the ATO. A Final indicat is to be provided by 14 August 2018 where applicable f the 17/18 year (then 31 July 2019 f the 18/19 year and 14 August 2020 f the 19/20 year) If the employer is in STP, then each employee repted to the ATO via STP is not entitled to a payment summary from the employer. They must look on mygov speak to their accountant. MyGov f Employees All employees are required to register f a mygov account if they wish to review their payment summary sent via the ATO. If the employee cannot access mygov etc., the law allows them to be directed to the ATO requesting a payment summary be issued by the ATO. Reality says employers will make this easy and provide a pay rept f the end of the year during the transition. Employee infmation will be available as prefill into the various income tax preparation platfms f their tax returns to be completed, i.e., mytax Tax Agent Software. Crecting a Payment Summary/End of Year Final Infmation Fix the infmation in the employers' source of truth (payroll system) Send an Update to the ATO with the Final indicat. The ATO will use the latest set of data with the Final indicat. Can I Enter on the 30th June 2018 and Not Issue Payment Summaries? Yes. If you have submitted an STP rept f an employee f the 17/18 year including the full year's infmation, and used the Final indicat befe the required date, then no requirement to issue payment summaries to those employees. If you miss the date (14 August 2018), then you must provide payment summaries to the employees and also use STP to set the indicat to Final. PAY- Bookkeeping f Single Touch Payroll (May 2018) The Institute of Certified Bookkeepers Page 5