This article describes how to finalise the EOFY STP process using a few steps, including the following.
1. Lodge Regular STP (Single Touch Point) Reports
Throughout the financial year, you should have submitted STP reports to the Australian Taxation Office (ATO) each time you paid your employees. To make sure your STP is up-to-date,
- confirm all your regular STP reports have been lodged correctly, and
- ensure no amendments are required.
2. Review Payroll Data
Review your payroll system data for the financial year to check it is accurate and up-to-date. This includes that employee details are verified as correct including,
- salaries,
- wages,
- allowances,
- deductions, and
- superannuation contributions.
3. Reconcile Payroll
After you have checked your payroll data, reconcile your payroll records. Additionally, to check for accuracy and consistency, compare your payroll system’s data with other records, such as:
- bank statements,
- payment summaries, and
- superannuation reports to ensure consistency and accuracy.
4. Update Year-to-Date (YTD) Values
Make sure that the YTD values for each employee are correct in your payroll system. YTD values should reflect the cumulative figures for:
- earnings,
- taxes withheld, and
- superannuation contributions for the entire financial year.
5. Finalise Payment Summaries
The next step is to generate and distribute payment summaries to your employees. Payment summaries indicate an employee’s income and the amounts withheld for tax purposes.
However, if you’re using STP, the ATO considers the information in the finalisation declaration equivalent to a payment summary.
6. Lodge Finalisation Declaration
Submit the finalisation declaration to the ATO by 14th July. Accordingly, you will have finalised your STP reporting and completed your STP obligations for the financial year.
7. Provide Employee Information
All relevant employee information must be reported correctly to the ATO. This includes details such as:
- Tax File Numbers (TFNs),
- superannuation contributions, and
- any other required information.
8. Verify Superannuation Payments
Double-check that all superannuation contributions have been paid to the correct super funds by the required due dates.
If you fail to comply with superannuation requirements, consequently, you could face significant penalties, i.e., $$$$$.
9. Keep Records
Maintain accurate records for at least five years. This is important because you may need them for future reference or a potential audit. Records include:
- STP reporting,
- reconciliation,
- payment summaries, and
- related documents.
Following these steps will enable you to finalise the EOFY STP process.
If you would like further assistance or advice, contact our team of experts today.