STP finalisation declarations must be submitted annually by employers by the 14th of July. It’s important to meet this deadline to ensure your employees can access their Income Statements. Income Statements are required for the employee to complete their income tax returns. If you can’t make your finalisation declaration by the due date, you’ll need to apply to the ATO for a deferral. If you have finished your payroll for the year, you can make your finalisation declaration sooner.
Getting it right
It’s most important to ensure your payroll information is accurate before making your STP finalisation declaration. It can sometimes be tricky to get the right information to report at the correct labels. Some of these items may include:
- Employment termination payments (ETP)
- Lump sums
- Foreign employment income
- Reportable fringe benefits amounts (FBT)
- Reportable superannuation contributions (RESC)
- Allowances
If you require assistance please feel free to contact us for help.
Exceptions to the reporting date of 14th of July
Employers must lodge the STP finalisation declaration for all arms-length employees by the 14th of July however deadlines differ for closely held employees.
Closely held employees explained
A closely held employee is an individual directly related to the entity from which they receive payments. Examples of closely held employees are:
- Family members of a family business
- Directors or shareholders of a company or
- Beneficiaries of a trust
You only need to report amounts that you pay to closely held employees which are subject to withholding, and in scope of STP reporting. It depends on how the payment is classified, not who the recipient is. The same person may receive payments that are classified differently.
Some common examples of payments made to a closely held employee that need to be reported may include salary & wages and directors fees.
Other examples may include payments to a beneficiary of a trust, dividends paid to a shareholder, or loans paid to closely held employees as a loan from the business. These types of payments made to a closely held employee do not need to be reported.
Reporting deadlines explained
If you are an employer with 20 or more employees, you should be reporting closely held payees each pay day along with arms-length employees. The STP finalisation due date for closely held payees is 30 September each year. All other arms-length employees are due 14th of July.
For smaller employers with 19 or fewer employees who ONLY have closely held employees, the due date for STP finalisation declaration will be the employees’ income tax return due date.
Employers with a mixture of closely held employees and arms-length employees will need to report the 14th of July for arms-length employees and the 30th of September for closely held employees.
Information to provide your employees after STP finalisation
It is important to provide your employees with some information after you have completed your STP finalisation declaration. Since the implementation of STP, you no longer have to provide your employees with payment summaries, nor do you have a requirement to lodge a payment summary annual report. Information to provide your employees with is as follows.
- Let your employees know you have reported and finalised through STP. Depending upon what software you are using, you may be able to action this via the application.
- The employee can access their year-to-date and end-of-year “income statement” (the term to replace payment summary) online through myGov, or they can talk to their registered tax agent.
- Let your employees know they must check that their income statement is ‘Tax ready’ before lodging their tax return.
- Note: Employees can view their payment information at any time in the ATO online services through their myGov login. It’s important to be aware they will see the status of the information change on the 1st of July from “year-to-date” to “not-tax-ready”. The status will change to “tax-ready” once the employer has submitted the STP finalisation declaration.
- Let employees know they should check their personal details, and if required, update both yourself and the ATO. Incorrect personal details may prevent them from seeing their STP information.
- If the employee has not set up a myGov account, they can easily set one up or they can contact their tax agent, or call the ATO on 13 28 61.
Please contact us if you require help with completing your STP Final declaration .
