Purpose

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.

Alternatively, you can do this on a per pay schedule basis. This means that if you have over one default pay schedule (i.e. pay schedule assigned to an employee via their Pay Run Defaults screen) 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. 

Availability

Getting started

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:
     • This report will contain the information for only the employees that were 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 pays 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.
     • This includes any employees that had been 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 you will list them in the finalisation event wizard under the following image of a warning banner that may appear:

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

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

• STP Year To Date
  • This contains all payroll earnings reported for all employees (attached to the selected pay schedule/s) via STP for the financial year
• Itemised gross
  • This contains the earnings reported via STP for all employees for the financial year (as above), but separated into individual payment classifications.
• ETP
  • This 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
  • This 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.

• • 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. This is because they will be excluded from STP events and so should not be included for reconciliation;  
• Variance
  • This 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. 

As per the above finalisation event image, 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 (ie. 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 the 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. This will help pinpoint the specific affected employee(s) then investigate further where the issue may lie. 

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. Subsequently, you may find that one or more of these employees were not have 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.

This would result in an STP YTD amount that is less than their Payroll YTD amount.

Then, once confirmed that the update event was lodged 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, and you can see that it has 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 (in the employee's Pay Run Defaults screen).
  • 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 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 default.
  • Any earnings associated to pay categories classified as default will be reported via STP. Reimbursements typically are not payroll related and should now classify as Exclude from Payment Summary (Income statement) although the business should undertake such an assessment.
  • If a pay category and its payment classification has been setup incorrectly, you must first make the required correction 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 (do this via the "Actions" button in the finalisation event > "Refresh Data" option). 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, (they may not be included as they were previously finalised in a prior event) then you should create and lodge an update event for the affected pay schedule(s) 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 option
    • Then, once confirmed that the update event has been lodged successfully refer back to the created finalisation event and refresh the data
      • Click on the Actions button in the Update Event
      • 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. 

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

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