How to finalise payroll for the 2023FY - An employers guide.

‍

Preparing for the end of the financial year is essential, and with 30 June approaching rapidly, it's a perfect time to ensure your payroll processes are in order. As in previous years, all employers must finalise their payroll for the year using the Single Touch Payroll (STP) system. However for the 2023FY STP2 is in effect.

STP Finalisation Process for the End of the Financial Year

Each accounting software, including Xero, QuickBooks, and MYOB, has its own STP finalisation process that must be followed to provide accurate information for your employees' tax returns. Below, you'll find helpful guides and instructions for the most commonly used payroll software:

Xero

QuickBooks Online

‍

Important Dates for STP Finalisation

Depending on your specific circumstances, you may have different due dates for completing your STP finalisation:

• Employers with no closely held employees: The due date for end-of-year STP finalisation is 14 July 2023.
• Employers with a mix of closely held and arm's length employees, with a total of 20 or more employees: The due date for end-of-year STP finalisation is 30 September 2023 for closely held employees, while all other employees must finalise by 14 July 2023.
• Small employers (19 or fewer employees) with only closely held payees: The due date for end-of-year STP finalsation will be the payee's income tax return due date.

Employee Perspective

As an employer, you may receive common questions related to STP from your employees. Here are some helpful tips to assist you in answering these questions:

How can I access my wages for the year?

Employees can access their end-of-year income statements through their personal myGov account or consult with their accountant.

How will I know when I can lodge my tax return?

Once the employer has processed the STP finalisation event, employees will see the status of their payment information on myGov change to "tax ready."

Single Touch Payroll Phase 2

Starting from 1 January 2022, the ATO has expanded the STP system, known as "STP Phase 2," which transmits additional information to the ATO with each pay run lodgment. The previously reported "gross wage" figure is now broken down into its components, including ordinary hours, allowances, bonuses and commissions, directors' fees, and overtime.

Xero recently adopted STP Phase 2, enabling the lodgment of pay runs via the new system as of 31 March 2023. For instructions on how to setup STP Phase 2 with common payroll products, you can refer to the following links:

Xero

QuickBooks Online

‍

CTK Accounting is a reputable accounting firm in Wollongong, serving clients throughout Australia. We're always ready to assist you. If you need more information regarding accounting and payroll software options, feel free to reach out to our team for tailored advice to meet your specific needs.

We wish you and your business every success!

‍