Completing the End of Year Reconciliation with Single Touch Payroll (STP) | Payroll FAQ

A crucial part of wrapping up End of Financial Year (EOFY) is reconciling employee earnings reported via Single Touch Payroll (STP) during the financial year, with employee earnings processed in completed pay runs for that same financial year. When creating a finalisation event, you can select to do this for all pay schedules.

Important

The option is only available for businesses with less than 2000 active employees at the time of running the event.

Alternatively, you can do this on a per-pay schedule basis. It means that if you have more than one default pay schedule, i.e. a pay schedule assigned to an employee via their Pay Run Defaults page. You will need to create and lodge a finalisation event for each one and therefore will also need to reconcile each event/pay schedule separately. 

Glossary

Answers

  How do I download the STP Excel report?  

You can download the STP Excel report directly from the finalisation event.

  1. Log into your Employment Hero Payroll platform.
  2. Click the Download button from within the event
  3. You will see the following two reporting options:
    • Excel:
      • The report will contain the information for only the employees that you included in the finalisation event. 
      • The totals in this report will match the totals that appear at the bottom of each column in the UI for the finalisation event. 
    • Excel (YTD):
      • You will need this report to reconcile what you will report via STP for the financial year against the payments processed in finalised pay runs.
      • The YTD report lists all employees included in a successfully lodged STP event for the specified pay schedule(s) you have used to create the finalisation event.
      • It includes any employees that you have marked as final during the financial year and so are not appearing in the finalisation event. You will know who those employees that are not appearing in the finalisation event are, as we will list them in the finalisation event wizard.

  How should I reconcile using the Excel (YTD) report?  

Upon opening the Excel (YTD) report, you will notice four worksheets:

STP year to date

 It contains all payroll earnings reported for all employees (attached to the selected pay schedule/s) via STP for the financial year

Itemised gross

 It contains the earnings reported via STP for all employees for the financial year (as above), but we separate it out into individual payment classifications.

ETP

 It contains all ETP earnings reported for all employees attached to the selected pay schedule/s) via STP for the financial year.

Payroll year to date

 It contains all payroll earnings processed in finalised pay runs for all employees whose primary pay schedule is the pay schedule selected when creating the finalisation event.

Important

If you have created a finalisation event for the monthly pay schedule, any employee that you have set to the default monthly pay schedule will appear in the worksheet. Additionally, all earnings processed in any finalised pay run for that employee will appear. Even if you have included the employee in any ad hoc pay run throughout the financial year. Any employee marked as a closely held employee will not appear. It is because we exclude them from STP events and so you should not include them for reconciliation.

Variance

It compares the total YTD taxable earnings between the 'STP Year To Date' and the 'Payroll Year To Date' worksheets, which is basically a comparison of what you have reported via STP and what you have processed in pay runs.

If you reported the variance amount as $0, this confirms all figures match and you can comfortably proceed with lodging your finalisation event. If the variance amount is greater than a few dollars, we say a few dollars to allow for rounding, you will need to investigate further and identify/resolve the discrepancy before proceeding with the finalisation event lodgement. 

Helpful Hint

The Not Reported line referenced in the line Minus Not Reported in the STP YTD calculations column on this tab refers to column V (Not Reported) on the STP Year To Date tab. The Not Reported figure/column covers all earnings paid with the payment classification Exclude from Payment Summary (Income Statement)

You can include some of these earnings on the ETP tab in this sheet, because ETP payments made with pay categories with this payment classification are separately reported. It explains why you can add these amounts back into the calculation, as the point of the exercise is to reconcile STP reporting to total pay runs processed.

If the variance calculated in your Excel YTD report is nil and you plan to compare the totals in this report with another report. Be aware of allowances marked with an asterisk in the STP event. They will have been reduced by pre-tax deductions, as there is not enough in non-allowance earnings to cover the deduction. These are the clues to look out for:

  • First, something that may need another look about an employee in this scenario is the asterisk against the Allowances total.
  • Second, gross payments are nil, meaning all ordinary earnings have been salary sacrificed.
  • Third, total earnings across all STP categories in the event i.e. Gross payments + Allowances + Lump Sums are not equal to the Total gross figure.

  What are my next steps if there is a variance?  

If you are in a situation where your report shows a variance higher than a few dollars, the first thing to do will be to compare each employee's earnings stated between the STP YTD report and Payroll YTD reports. It will help pinpoint the specific affected employee(s) then investigate further where the issue may lie. 

A general rule of thumb is if the variance is a negative amount, this means what you have reported via STP which includes the finalisation event is less than what you have processed in pay runs. If the variance is a positive amount, then the opposite applies; i.e. what you have reported via STP which includes the finalisation event, is higher than the taxable earnings processed in pay runs.

  What could cause a negative variance?  

The main reason for a negative variance could be that one or more employees were being included in a failed or partially successful pay event and so their YTD earnings were not being reported. Afterwards, you may find that one or more of these employees were not ‌included in another event, stopped working, and so there were no other earnings to report and/or previously marked as is final, which meant they were either: 

  • Never reported successfully via STP or
  • Their current YTD earnings have not been reported.

It would result in an STP YTD amount that is less than their Payroll YTD amount. If this is the case, create and lodge an update event for the affected pay schedule before lodging the finalisation event.>Then, once confirmed that you lodged the update event, successfully, refer to the created finalisation event, and refresh the data.

  • Click the Actions button.
  • Select the Refresh Data option..
  • Download an updated version of the Excel (YTD) report and check that there is no longer a variance before proceeding with the finalisation event lodgement.

  What could cause a positive variance?  

Possible reasons could be:

Closely held employees

If you have included an employee in any successful STP events throughout the financial year, ‌you can see that it we have marked them as closely held as a result, meaning that they were no longer being reported via STP.

If this is the case, unmark the employee as closely held so that they will be in the finalisation event. You must not generate/lodge payment summaries for these employees, as it will overstate their YTD earnings for the financial year. To report on an employee who has the closely held mark:

  • Select the reporting option Report employee each pay run for their STP income types on the employee's Pay Run Defaults page.
  • Refer to the created finalisation event and refresh the data. You can complete this via the Actions button and selecting the Refresh Data option.
  • Download an updated version of the Excel (YTD) report and check that there is no longer a variance before proceeding with the finalisation event lodgement. 

Incorrect pay category payment classification

There may be instances where PAYG-exempt pay categories reimburse expenses or for any other reasons and are received by an employee when processing their normal pay. If this payment does not form part of an employee's wages/salary, you will need to review the payment classification of that pay category if they currently set it to the Default option.

Any earnings associated to pay categories classified as default we will not report via STP. Reimbursements typically are not payroll related and you should classify them as Excluded from Payment Summary (Income statement) although the business should undertake such an assessment.

If you have setup a pay category and its payment classification incorrectly, you must first make the required corrections to the classification. Then, what you do next depends on whether you include the affected employees in the finalisation event or not:

  • If all affected employees are listed in the finalisation event, then you just need to refresh the data . Then download an updated version of the Excel (YTD) report and check that there is no longer a variance before proceeding with the finalisation event lodgement.
  • If not all affected employees are listed in the finalisation event, you should create and lodge an update event for the affected pay schedule before lodging the finalisation event.
  • If the affected employees do not appear in the update event, you can manually add them in
    • Click on the Actions button in the Update Event
    • Select the Add Employee button.
  • Then, once confirmed that the update event lodged successfully, refer to the created finalisation event and refresh the data
    • Click on the Actions button in the Update Event.
    • Select the Refresh Data button.
  • Download an updated version of the Excel (YTD)
  • Report and check that there is no longer a variance before proceeding with the finalisation event lodgement. 

  Can I access the Excel (YTD) report in an amended finalisation event?   

Yes you can. The same process and format of the report as described above is available in all amended finalisation events. 

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