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What is Single Touch Payroll (STP)?

Single Touch Payroll is a government initiative that changes the way employers report on employee payment information. This has come into effect from the 1 July 2018 for businesses with 20 or more employees. Legislation to extend STP for businesses with 19 or less employees has passed the Senate with some amendments which are currently with the House of Representatives to be passed however, it’s still expected to begin from 1 July 2019.

STP Reporting is designed to streamline business reporting obligations, enabling employers to report payments such as salaries and wages, pay-as-you-go (PAYG) withholding and superannuation information directly from their payroll solutions at the same time they pay employees.

This means the ATO will have real-time access to Australian payroll data linking PAYG to Business Activity Statements (BAS) and Superannuation Ordinary Times Earnings Calculations.

For more information, please visit ATO's website.

Configuration Settings

First thing's first - you need to ensure all settings are complete before jumping ahead and lodging pay events. We strongly suggest you complete each of the following and in the order we have presented:

Section 1. Enable STP

ATO Supplier Settings can be accessed and updated by clicking on the 'Payroll Settings' tab of your payroll dashboard, then click on ATO Supplier Settings under the 'Business Settings' heading.

I. ATO Supplier Settings

These details are used to populate the supplier information when generating reports to be submitted to the ATO.

The first setting requires you to select the applicable scenario of the business. That is, who will be submitting reports to the ATO on behalf of this business. The three options available are:

Payroll Single Touch Payroll Reporting

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1. The Employer

This option should be selected if no external TAX/BAS Agent will be lodging submissions to the ATO on the business's behalf and there is only one employing entity set up in the business.

If you have selected "As the Employer", you will be required to complete the following information:

• ABN • Branch Number* • Name • Address Line 1 • Address Line 2* • Suburb • Contact Name • Signatory Name* (only required to be completed if you want the name on the

payment summaries to be different to that entered in the 'Contact Name' field above) • Phone Number • Fax Number* • Is this employer exempt from FBT under section 57A of the FBTAA 1986? (If you select

Yes here, a dropdown list will appear and you will need to select what exemption the business falls under. This setting is crucial as it will be used in determining what FBT amounts are exempt and taxable when submitting pay data to the ATO.

N.B. The items marked with an asterisk (*) are not compulsory fields.

2. A Registered TAX/BAS Agent

This option should be selected if an external TAX/BAS Agent will be lodging submissions to the ATO on the business's behalf, even if there is one or more employing entity set up in the business.

The ATO have reported that users lodging STP reports on behalf of clients are considered to be providing a payroll service and will therefore need to be registered as an agent with the Tax Practitioner Board (TPB).

For further information, visit Registered agents providing a payroll service on ato.gov.au.

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This setting is broken up in 2 sections:

(a) the TAX/BAS Agent details and

(b) the Business details. The business details fields required to be completed are identical to the "As the Employer" details above.

The additional details required to be completed pertain specifically to the TAX/BAS Agent themselves and are as follows:

• Tax Agent Number • ABN • Contact Name • Phone Number • Contact Email

All the TAX/BAS Agent fields are compulsory. You will not be able to save the ATO Supplier Settings without completing all the fields.

3. An intermediary for multiple employing entities

This option should be selected if the employer is lodging all ATO submissions and there is more than one employing entity set up in the business.

This setting is broken up in 2 sections:

(a) the Intermediary details and

(b) the Business details. The business details fields required to be completed are identical to the "As the Employer" details above.

The additional details required to be completed pertain specifically to the Intermediary themselves and are as follows:

• ABN • Contact Name • Phone Number • Contact Email

You can choose one of the employing entities to act as the Intermediary or another entity of the business. All the Intermediary fields are compulsory. You will not be able to save the ATO Supplier Settings without completing all the fields.

Copy Business Details

A handy feature in this screen is the ability to "Copy from Business Settings". If you click this button (to the right of the "save" button, it will populate the Business fields from the information entered in the "Details" (Payroll Settings > Details) screen. This function can be used regardless of what ATO setting chosen.

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II. Electronic Lodgement & STP

By default, you will see the Electronic Lodgement & Single Touch Payroll (STP) sections on this screen and both will be disabled.

N.B. The electronic lodgement and STP reporting is powered by KeyPay.

Enabling electronic lodgement will then allow you to lodge employee tax file declarations and payments summaries online directly to the ATO. You must also enable electronic lodgement before you can enable STP.

To enable electronic lodgement, you must contact the ATO on 1300 852 232 where you will be asked to quote your software provider and software ID (this information is located in the “Enable Electronic Lodgement” box as displayed above. The software ID is a unique number per business and so should not be shared with anyone else outside of the ATO. Once the ATO has provided confirmation, you will then click on "Enable Electronic Lodgement".

It is essential this step is completed correctly otherwise your STP lodgement will fail. Refer here for details on the error that will occur.

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To enable STP, simply click on "Enable Single Touch Payroll". The following popup will appear:

If you want to proceed, click on Confirm". Once that is done, you will notice additional sections appear on the screen, being:

• Business Management Software (BMS) ID: This is the unique ID that is used by the ATO to identify your business. You are only required to do something here if you were previously lodging STP events during the financial year using another payroll platform and want to migrate that platform's BMS ID to this platform. Refer below on the rules for changing BMS IDs between payroll systems. To change the BMS ID, click on "Change" whereby the following popup will appear:

Enter the old BMS ID in the relevant field and click on "Save".

N.B. If your old BMS ID is not in the format XXXXXXX-XXXX-XXXX-XXXX-XXXXXXXXXXXX, do not enter the ID in the field. Rather, you must email payroll support and provide them the ID as they will need to enter this manually.

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Rules for changing BMS IDs during financial year

As stated previously, this applies to businesses that have already been STP reporting during the financial year and are now moving to another payroll system. The rules and scenarios outlining how to transition from one BMS ID to another mid financial year are as follows:

Option 1: You can change the BMS ID to the original/previous BMS ID if you transfer all YTD employee wages to the new payroll system. Instructions on how to do this are provided above.

Option 2: If you transfer all YTD employee wages to the new payroll system and you DO NOT want to revert to the original/previous BMS ID (that is, you want to keep the new BMS ID) you will need to zero the employee YTD values from the old BMS ID (and hence old payroll software). This will need to be done via an update event in order to prevent duplicate information being submitted to the ATO.

Option 3: If you do not transfer YTD employee wages to the new payroll system and you DO NOT want to revert to the original/previous BMS ID (that is, you want to keep the new BMS ID), you will be required to finalise employees reported under the original BMS ID. That is, the final pay event under the original BMS ID (ie the previous payroll software) will need to be marked as a final pay event.

• Standing Authority Declaration: This section will only appear if the registered TAX/BAS Agent is set as the ATO lodgement type. Where a business's payroll is being prepared and submitted by an authorised registered agent (ie a TAX/BAS Agent), a declaration should be made by the employer or authorised employee at the time of providing the information to the Agent and the wording of the declaration should be in accordance with the requirements set out within the Taxpayer Declaration Guide. If this declaration has been completed, you can enter the details of this authority here. You are then able to use the Standing Authority when lodging pay events that include the same payroll information on a defined schedule. For example, an ongoing fortnightly pay run that includes the same payroll information each pay schedule where no ad-hoc payments are being made such as bonuses, commissions, back pays, etc. If the payroll information changes for a particular pay run, the Agent must request client authority prior to lodging the pay event.

To add a Standing Authority, click on "Add Standing Authority" whereby the following popup will appear:

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(a) Enter the full name and email address of the person who has provided the standing authority, in the form of "[First Name] [Surname] / [email address]";

(b) enter the date the written authority was provided; and

(c) click on "Save".

It is not compulsory for a registered agent to have a Standing Authority with their client - that is, it is not essential for STP reporting. All this means is that before you lodge a pay event, you will need to request client authority from within the system. The person(s) appointed to provide the authority will log into the applicable pay event and approve the event. Only after this time will the registered agent have the ability to successfully lodge the pay event.

III. Converting allowance settings to make STP compliant

Ensure the payment summary classification setting against each pay category is correct. Pay particular attention to allowance based pay categories as the ATO has changed the reporting requirements for allowances.

N.B. The new allowance settings do not affect how allowances are recorded on any new or existing payment summaries.

Under Single Touch Payroll (STP), specific types of allowances are to be separately itemised on the Income Statement, similar to what currently occurs with payment summaries. The difference with STP however, is that the separately itemised allowances are to be grouped and reported by category.

The rules for categorising allowances are aligned with the ATO's Withholding for allowances tables that can be accessed from HERE.

To edit any pay category settings, go to Payroll Settings > Pay Categories. Click on the pay category name and then click on the "Payment Summary Classification" dropdown list. You will notice the additional allowance classifications added to this list:

Existing allowance based pay categories whose payment summary classification was set as "Allowance" is now defaulted to "Allowance (Other)".

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IV. Full access users can choose to receive email notifications pertaining specifically to STP pay events. These notifications relate to:

• When a lodgement fails. This will allow users who process the lodgements to move away from the screen to carry on with other work. Additionally, it allows users who are not lodging pay events to stay up to date with any lodgement issues. To activate this notification, click on "Email me when there is a Lodgement error" from the “My Notifications” screen.

• When an STP Pay Event Approver approves or rejects a pay/update event.

This setting is only relevant to businesses using a registered Tax/BAS Agent to lodge pay events on the business's behalf. This will allow users responsible for lodgements to be notified when a requested pay event approver has either approved or rejected the event. If the event has been approved, the lodger can continue with the lodgement process. If the event has been rejected, further action will be required before the event can be lodged. To activate this notification, click on "Email me when a pay event is approved or rejected" from the “My Notifications” screen.

Section 2. Creating & Lodging Events

There are two types of events that can be lodged with the ATO:

1. a Pay Event; 2. an Update Event.

A summary of all events can be found via Reports > Single Touch Payroll.

Pay Events

Whenever an employer makes a payment (that is, creates a pay run) to an employee that is subject to withholding, they are required to lodge a pay event with the ATO on or before the date the payment is made. This includes where the amount of withholding is $0 (for example where an employee's gross income is below the tax-free threshold) or where the employee has no net pay (for example where the employee is repaying an advance or overpayment to the employer, voluntarily foregoing their net pay).

A pay event reports employee YTD gross payments, tax withheld, allowances, deductions and superannuation liability information for each individual employee reported. As employee amounts

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are YTD, once an amount has been reported it should continue to be reported even if it has not changed (for example ETPs should continue to be reported in each pay event after they are first reported if the employee is included in any subsequent pay events).

Basically, once a pay run is finalised, a pay event should be lodged with the ATO.

Creating a pay event

A Pay Event can only be created upon finalising a pay run. You will now be provided the following new option when finalising a pay run:

a) When choosing to lodge a pay event manually at a later date If you choose this option and then click "Finalise", the pay run will finalise as per the standard process. To lodge the event at another time, you simply need to access that pay run and click on "Lodge Pay Run with ATO":

b) When choosing to lodge a pay event now If you choose this option and then click "Finalise", the pay run will finalise as per the standard process and then you will be redirected to the Create Pay Event lodgement screen.

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Create Pay Event Lodgement Screen

A list of all employees with payment details attached to that pay run will appear on the screen along with their year to date details

A few things to point out when a pay event is generated:

1. You can filter your view by searching for a specific employee or by employing entity (if you have more than one employing entity set up in the business). Please note however that when the event is lodged it will lodge for ALL employees in that pay event; that is, the filtering does not filter the data lodged with the ATO.

2. Employees who have been employed by more than one employing entity during the financial year will have a row of data per employing entity.

3. Employees who have changed between a working holiday maker (where Type = H) and a non-working holiday maker (where Type = S) during the financial year will have a row of data per tax change.

4. Terminated employees who have received an ETP will still appear in the event with the "Is Final" checkbox automatically ticked - refer to Grace Lim above as an example.

5. You can choose to view the payroll figures pertaining to the actual pay run in addition to the YTD figures by clicking on "Show figures from this pay run". The screen view will update to include the pay run figures, highlighted in blue:

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Can I edit any information contained in a Pay Event?

There are only 2 items that can be edited in a pay event:

1. Reportable Fringe Benefits Amount (RFBA): You can choose to report employee RFBA on an ongoing basis or at the end of the financial year. To edit an employee RFBA, click on the pencil icon under the RFBA column for the specific employee, enter the grossed up RFBA value and then click on the green tick icon. If you choose to enter RFBA on an ongoing basis, you must enter the amount as a YTD value.

2. Is Final: If an employee has terminated employment and a termination pay has been processed, the "Is Final" checkbox will be ticked automatically. If the employee has not been terminated within a pay run but there will be no further payments for that employee in the financial year, you can tick the "Is Final" checkbox. This will indicate to the ATO that no further payments for this employee will be made. If an employee is reinstated and the same employee payroll ID is used, you will need to untick the "Is Final" checkbox.

Lodging a Pay Event

To lodge a pay event, click on "Lodge with ATO".

A lodgement declaration will appear in a popup that needs to be completed before the lodgement is complete. The instructions here are different depending on your ATO Settings:

I will be lodging reports to the ATO as the Employer

The following popup will appear:

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I will be lodging reports to the ATO as a registered Tax/BAS Agent

The following popup will appear:

When completing the "Using authority" requirement, the dropdown list will show you any Standing Authority, along with any Client Authority who has either rejected the lodgement and/or approved the lodgement. You cannot select the authority who has rejected the lodgement. You should only be selecting a Standing Authority or Client Authority who has approved the lodgement. If there is no Standing Authority or Client Authority who has approved the lodgement, you cannot proceed with the lodgement and will need to obtain that authority beforehand.

Once the relevant authority has been selected in the dropdown list, the only requirement thereafter is to tick the declaration checkbox and then click on "Lodge Pay Event".

This ATO setting does not prevent a business owner from lodging pay events with the ATO (so long as they are a full access user). The only difference here is the business owner will need to select "Business Owner" from the "Lodge as" dropdown list. This will then remove the "Using authority" requirement. The business owner then needs to tick the declaration checkbox and then click on "Lodge Pay Event":

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I will be lodging reports to the ATO as an intermediary for multiple Employing Entities

The following popup will appear:

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Tick the declaration checkbox and then click on "Lodge Pay Event". The lodgement is then queued for ATO submission.

Deleting a Pay Event

Pay events cannot be deleted.

Update Event

An update event is used to report changes to employee YTD amounts previously reported to the ATO. Update events are not associated to any pay runs and thus can only be created when an employee payment has not been made. Other examples of why an update event would be created include:

• Upon transferring YTD payroll data from one payroll system to another to align the latest employer BMS data with the last employee data reported to the ATO;

• To assist with EOFY processes, including finalisation and amendments to STP. After 30 June, any changes made to reported employee data for the prior financial year must only be submitted through an update event.

Creating an Update Event

An update event can only be created via Reports > Single Touch Payroll (listed under "ATO Reporting").

To create an update event, click on "Create Update Event" on the top right hand side. A popup will appear where you need to select the financial year and pay schedule pertaining to this update event; then click on "Create":

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A list of all employees attached to that pay schedule will appear on the screen along with their year to date details:

A few things to point out when an update event is generated:

1. You can filter your view by searching for a specific employee or by employing entity (if you have more than one employing entity set up in the business). Please note however that when the event is lodged it will lodge for ALL employees in that pay schedule; that is, the filtering does not filter the data lodged with the ATO.

2. Employees who have been employed by more than one employing entity during the financial year will have a row of data per employing entity.

3. Employees who have changed between a working holiday maker (where Type = H) and a non-working holiday maker (where Type = S) during the financial year will have a row of data per tax change - refer to Ashley Bailey above as an example.

4. Terminated employees who have received an ETP will still appear in the event with the "Is Final" checkbox automatically ticked - refer to Dannielle Maher above as an example.

Can I edit any information in an Update Event?

There are only 2 items that can be edited in an update event:

1. Reportable Fringe Benefits Amount (RFBA): You can choose to report employee RFBA on an ongoing basis or at the end of the financial year. To edit an employee RFBA, click on the pencil icon under the RFBA column for the specific employee, enter the grossed up RFBA value and then click on the green tick icon. If you choose to enter RFBA on an ongoing basis, you must enter the amount as a YTD value.

2. Is Final: If an employee has terminated employment and a termination pay has been processed, the "Is Final" checkbox will be ticked automatically. If the employee has not been terminated within a pay run and there will be no further payments for that employee in the financial year, you can tick the "Is Final" checkbox. This will indicate to the ATO that no further payments for this employee will be made. If an employee is reinstated and the same employee payroll ID is used, you will need to untick the "Is Final" checkbox.

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Lodging an Update Event

To lodge an update event, click on "Lodge with ATO".

A lodgement declaration will appear in a popup that needs to be completed before the lodgement is complete. The instructions here are different depending on your ATO Settings:

I will be lodging reports to the ATO as the Employer

The following popup will appear:

Tick the declaration checkbox and then click on "Lodge Update Event". The lodgement is then queued for ATO submission.

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I will be lodging reports to the ATO as a registered Tax/BAS Agent

The following popup will appear:

When completing the "Using authority" requirement, the dropdown list will show you any Standing Authority, along with any Client Authority who has either rejected the lodgement and/or approved the lodgement. You cannot select the authority who has rejected the lodgement. You should only be selecting a Standing Authority or Client Authority who has approved the lodgement. If there is no Standing Authority or Client Authority who has approved the lodgement, you cannot proceed with the lodgement and will need to obtain that authotity beforehand.

Once the relevant authority has been selected in the dropdown list, the only requirement thereafter is to tick the declaration checkbox and then click on "Lodge Update Event".

This ATO setting does not prevent a business owner from lodging update events with the ATO (so long as they are a full access user). The only difference here is the business owner will need to select "Business Owner" from the "Lodge as" dropdown list. This will then remove the "Using authority" requirement. The business owner then needs to tick the declaration checkbox and then click on "Lodge Update Event":

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I will be lodging reports to the ATO as an intermediary for multiple Employing Entities

The following popup will appear:

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Tick the declaration checkbox and then click on "Lodge Update Event". The lodgement is then queued for ATO submission.

Deleting an Update Event

Update events can only be deleted if they have not yet been lodged with the ATO. To delete an update event, simply click on the "Delete Update Event" button. A confirmation popup will appear:

To confirm, click on "Delete". The event will be removed from the Single Touch Payroll reports screen.

Validation Warnings

When a pay/update event is created, you may notice a "Warnings" tab on the screen:

This indicates there are validation issues in the event. If the warning pertains to a business setting, this will need to be rectified before lodging the event. If the warning pertains to a specific employee, the employee will be excluded from the lodgement until the issue is fixed.

For a full list of validation warnings/errors, please refer to Appendix III – STP Validation Errors & Troubleshooting Guide

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Dashboard Notifications

Once you have sent a client authority request and/or lodged an event with the ATO, rest assured that you can leave the screen and move on to other exciting payroll activities. Your payroll dashboard will provide updates on the status of a lodgement up until it is deemed successfully lodged. Examples include:

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Appendix I - Common questions around Single Touch Payroll

1. Will I still need to submit a BAS? Yes – you’ll still need to submit a BAS, but the W1 and W2 values will be pre-filled.

2. Will I be able to adjust the pre-filled values on my BAS? Yes.

3. Will I still need to submit an annual payment summary report? If you use Single Touch Payroll reporting, you may not need to submit a payment summary report.

4. Will I still need to generate payment summaries for my employees? If you use STP reporting, you may not need to submit a payment summary report. The ATO will make that information available to employees through myGov.

5. Can I make PAYG or super payments through Single Touch Payroll? No, Single Touch Payroll is a reporting solution only. You will still need to make PAYG and super payments separately. If you use KeyPay, PAYG can be processed through an ABA file and super payments can be automated with ClickSuper.

6. Can I use single touch payroll even if I’m not required to? Yes – if you’re an employer that has 19 employees or under and you want to use Single Touch Payroll, then you should be able to do so.

7. Can a bureau or payroll provider or registered BAS agent submit Single Touch Payroll data on behalf of a client? Yes, bureau payroll providers and BAS agents will be able to lodge STP data on behalf of clients.

8. Where can I get more information on STP? The best place is to check the ATO website

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Appendix II - Transitioning to Single Touch Payroll during the financial year

While some employers will start reporting through Single Touch Payroll (STP) from 1 July 2018, many employers will have a deferred start date. This may be because their software is not ready, or for other circumstances beyond their control.

Employers who are granted a deferral will start reporting during the financial year, rather than on the first pay after 1 July. Refer to our information on deferrals.

Your digital service provider (DSP) will give you information to support you when you transition to STP reporting. They will let you know which of the following methods to use:

• Provide an opening year-to-date balance for all employees (active, inactive and terminated) in an update event.

• Report year-to-date balances for all employees (active, inactive and terminated) in your first pay event.

• Report year-to-date amounts for employees through a STP pay event and year-to-date amounts for inactive and terminated employees in a later update event which must be lodged by 14 July or the deferred due date.

• Report the current year-to-date balances for the employees included in your first pay event. Give payment summaries to terminated and inactive employees and lodge a PAYG payment summary annual report to cover the payments you made before your first STP pay event.

• Start your STP reporting with zero year-to-date balances and give payment summaries to all of your employees (current, inactive and terminated). Lodge a PAYG payment summary annual report for payments you made before your first STP pay event.

Changing payroll solutions during a financial year

If you start reporting through one STP solution and change to another during a financial year, you must transition correctly to make sure the information pre-filled into your employees' income tax return is accurate.

There are three options to transition to a new payroll solution during a financial year:

1. Migrate your year-to-date employee information to the new payroll solution. You will need to zero the employee year-to-date values from the old payroll solution through an update event to prevent duplicate information being displayed.

2. If you do not migrate year-to-date employee information to the new payroll solution you can start reporting your employee year-to-date amounts from zero. You will need to finalise the employee information reported under the original payroll solution.

3. Migrate your year-to-date employee information to the new payroll solution and use the

original BMS identifier in future pay event reporting.

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Appendix III - STP Validation Errors and Troubleshooting Guide

Employee Warnings

The list of employee validations warnings, their meaning and required fix are as follows:

• A valid postcode is required: The postcode must be 4 digits and an actual valid postcode. This will need to be fixed in the employee's details. Ensure both the employee's residential and postal postcodes are corrected.

• Tax File Number is invalid: The Tax File Number (TFN) must be 8 or 9 digits and match valid TFN algorithms. If the employee's TFN is invalid, you can select the "The employee quoted an invalid TFN" option from the employee's Tax File Declaration screen and then follow up with the employee at a later time.

• Address is too long: The Address Line 1 field in the employee's Details screen must be less

than 39 characters. Ensure that Line 1 does not include the suburb and/or postcode and that Line 2 is also used for multi-line addresses. Additionally, ensure the fix has been applied to both the residential and postal address sections.

• A valid address is required: The "Address Line 1" and/or "Suburb" fields have not been

completed. Both fields are compulsory so ensure these are completed in the employee's Details screen for both the residential and postal address sections.

• Invalid date of birth: The employee's date of birth must be less than 110 years. This needs

to be rectified in the employee's Details screen.

• Invalid email address: Email addresses go through a standard validation process. If this message appears, it may be that the email address contains an invalid character or the '@' symbol is missing. If the email address does appear to be correct, we suggest you completely delete it and enter it again. We have picked up on instances where the email address does contain invalid characters but they are not visible on the screen so deleting and re-entering is the easiest way to fix this.

• Year to date Allowances must NOT be negative: The ATO will not accept YTD allowance

amounts that are negative (ie, less than $0). You will need to unlock the pay run and fix this before the employee can be added to the event.

• Year to date Super must NOT be negative: The ATO will not accept YTD SG contribution amounts that are negative (ie, less than $0). You will need to unlock the pay run and fix this before the employee can be added to the event.

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• Year to date Super Deductions must NOT be negative: The ATO will not accept YTD salary sacrifice super contribution or employer contribution amounts that are negative (ie, less than $0). You will need to unlock the pay run and fix this before the employee can be added to the event.

• Year to date Union Fee Deductions must NOT be negative: The ATO will not accept YTD union fee deduction amounts that are negative (ie, less than $0). You will need to unlock the pay run and fix this before the employee can be added to the event.

Business Warnings

• Business is not enabled for lodgement: SBR or Electronic lodgement is not enabled. You cannot proceed without enabling both electronic lodgement and STP.

• Tax agent declaration signatory contains invalid characters: The user lodging the event may has an invalid email.

• Employer declaration signatory contains invalid characters: There are 2 possible scenarios here: (a) If an STP Pay Event Approver has been used to approve a lodgement, their email address may not be valid or (b) The user lodging the event may have an invalid email.

• ATO Supplier details must be completed: This means the ATO Supplier Settings have not been completed correctly or certain fields are missing data.

• The ABN entered for the Intermediary under ATO Settings is invalid: This warning will only appear if the business's ATO Settings are using "an intermediary for multiple Employing Entities" to lodge reports to the ATO. The issue here is that the ABN entered under the "Intermediary Details" section of the ATO Supplier Settings is invalid. Ensure the ABN entered is active and valid.

• The ABN entered for the Tax/BAS Agent under ATO Settings is invalid: This warning will only appear if the business's ATO Settings are using "a registered Tax/BAS Agent" to lodge reports to the ATO. The issue here is that the ABN entered under the "Tax/BAS Agent Details" section of the ATO Supplier Settings is invalid. Ensure the ABN entered is active and valid.

• Intermediary {Business Name} must have a contact phone number: This warning will only appear if the business's ATO Settings are using "an intermediary for multiple Employing Entities" to lodge reports to the ATO. The Phone Number field contained in the "Intermediary Details" section of the ATO Supplier Settings is empty. Ensure a phone number is entered in this field and only contains numeric characters.

• Intermediary {Business Name} has invalid characters in the contact phone number: This warning will only appear if the business's ATO Settings are using "an intermediary for multiple Employing Entities" to lodge reports to the ATO. The Phone Numberfield contained in the "Intermediary Details" section of the ATO Supplier Settings is invalid. Ensure the phone number only contains numeric characters.

• When lodging for multiple employing entities, the value of 'I will be lodging reports to the ATO' (under Payroll Settings > ATO Settings) must be set to either 'As a registered Tax/BAS Agent' or 'As an intermediary for multiple Employing Entities': If there are multiple

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employing entities set up in the business, the ATO Supplier Settings cannot be set as "As the Employer" lodging reports to the ATO. This setting must be one of 'As a registered Tax/BAS Agent' or 'As an intermediary for multiple Employing Entities'. You must fix these settings before you can proceed with the lodgement.

• The ABN entered for the {organisation name} under ATO Settings is invalid: This warning will only appear if the business's ATO Settings are using "As an Employer" to lodge reports to the ATO. The issue here is that the ABN entered in the ATO Supplier Settings screen is invalid. Ensure the ABN entered is active and valid.

• {Organisation Name} must have a phone number: This warning will only appear if the business's ATO Settings are using "As an Employer" to lodge reports to the ATO. You will need to ensure a valid phone number is entered in all of the following areas:

• Business Details screen; • ATO Settings screen; and • Employing Entities screen (if you have employing entities set up).

• {Organisation Name} has invalid characters in the phone number: This means the phone

number entered is invalid. You will need to ensure a valid phone number - containing only numeric characters or spaces that must be greater than 2 and less than 16 characters - is entered in all of the following areas:

o Business Details screen; o ATO Settings screen; and o Employing Entities screen (if you have employing entities set up). o {Organisation Name} contains invalid characters: This means the Legal Name or

Employing Entity name contains invalid or special characters not allowed by the ATO.

• {Organisation Name} contact name contains invalid characters: This means the Contact Name field contains invalid or special characters not allowed by the ATO.

• Employing entity {Name} is not enabled for lodgement: SBR or Electronic lodgement is not enabled for the specified employing entity. You cannot proceed without enabling both electronic lodgement and STP.

A few notables:

1. STP does not remove the requirement of lodging employee tax file declarations. If you have enabled electronic lodgement, the process is very straightforward. Instructions on this can be found via Tax File Declaration Reporting.

2. Employers with less than 20 employees can commence STP reporting although there is no obligation to do so till 1 July 2019.

3. Employers who report and finalise employee payments (and amounts withheld from them) throughout the year in line with their payroll process, will not need to provide corresponding payment summaries to employees nor a payment summary annual report to the ATO.

4. The ATO have reported that users lodging STP reports on behalf of clients are considered to be providing a payroll service and will therefore need to be registered as an agent with the Tax Practitioner Board (TPB). For further information, visit Registered agents providing a payroll service on the ATO website.

5. WPN holders are unable to lodge STP events. STP reporting can only be undertaken by businesses that possess an ABN. It is suggested WPN holders use a registered Tax/BAS Agent to lodge STP events.

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Appendix IV - STP Lodgement Errors

There may be times when lodgements don't go 100% smoothly and an error may occur. We have therefore compiled this troubleshooting guide in case this does occur.

Managing Failed or Partially Successful Lodgements

The ATO states that:

1. An employer needs to report data fixes within 14 days from when the issue is detected; or 2. An employer may choose to report a fix in the next pay event for an employee where this is

later than 14 days from when the error is detected. Additional time will be allowed to the next regular pay cycle for the employee. For example, monthly pay cycle; or

3. An employer may report a fix in an update event.

Refer below for instructions on how to manage an event that has failed or was partially successful.

Business Errors Error: CMN.ATO.PAYEVNT.EM92172, We were unable to process your submission because we already have a submission with this submission ID

This message usually appears where a business has multiple employing entities set up and the identical ABN is used for two or more of these entities. The ATO deems this as a duplicate lodgement and will hence cause the lodgement to fail. To resolve this, you will need to ensure all affected employees are transferred over to the one common employing entity. This is done via the employee's Tax File Declaration screen.

Error: CMN.ATO.GEN.200001, An unexpected error has occurred. Please contact the Tax Office

When the error CMN.ATO.GEN.200001 is received, it usually means one of two things.

• EITHER the employer has not enabled KeyPay as a hosted SBR software service within Access Manager

• OR The employer is using a tax agent and has not appointed the tax agent within Access Manager

Firstly, it's worth noting under Payroll Settings > ATO Settings whether electronic lodgement is occuring as the Employer or the Tax Agent.

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Additionally, note your software ID under 'Electronic Lodgement & STP'

Lodging as the Employer

If you are lodging as the employer and receive a CMN.ATO.GEN.200001 error, you should ensure that KeyPay is set up as the software sending provider on the ATO Access Manager site. To do this:

• Log into Access Manager https://am.ato.gov.au/ • Click on "My hosted SBR software services"

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• Ensure that KeyPay is listed under "My hosted SBR services":

If it is not listed, click 'Notify the ATO of your hosted service" and then search for KeyPay

• Click on the ABN and then check whether your software ID is listed:

• If it is not listed, enter the software ID into the 'Add Software IDs' text box and click 'Next'

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• On the final page, click 'Save'

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Now, please try re-lodging your Pay Event.

Lodging as a Tax/BAS Agent

A business with a registered tax agent will be required to log into the ATO Business Portal and grant the tax agent permission to manage Single Touch Payroll for the business. To do this:

• Log into the the ATO Business portal with your AUSkey • Go to ‘Access Manager’, login, click on ‘who has access to my business’, then in the blue band

near the top ‘Appoint New Business’ • Enter the registered agent

• There is then a step to choose the access level. Under the heading ATO Transactions you will need to choose “Payroll event form” for “Lodge & View” as shown below

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Error: CMN.ATO.GEN.XML03, The value specified for an item does not match the item type (value = "[specific value detailed here]", item type = String, uniqueID = http://www.sbr.gov.au/ato/payevnt:TelephoneMinimalN) Hint: The Pattern constraint failed.

This error relates to an invalid value entered in the Contact Phone Number/Phone Number field.

Only numbers can be entered in this field. You will need to ensure the issue is fixed in all of the following areas:

1. Business Details screen; 2. ATO Settings screen; and 3. Employing Entities screen (if you have employing entities set up).

Error: CMN.ATO.GEN.XML04, The element “AddressDetailsPostal” in namespace ‘http://www.sbr.gov.au/ato/payevnt’ has invalid child element ‘CountryC’ in namespace ‘http://www.sbr.gov.au/ato/payevnt’. List of possible elements expected: ‘Line 1T’ in namespace ‘http://www.sbr.gov.au/ato/payevnt’. Hint: while processing parent element [AddressDetailsPostal] child mandatory element [Line 1T] was expected but not found.

If you get this error it means that the company address has not been completed. N.B. The "Address Line 1" and "Suburb" fields are compulsory.

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You will need to ensure the issue is fixed in all of the following areas:

1. Business Details screen; 2. ATO Settings screen; and 3. Employing Entities screen (if you have employing entities set up).

Error: CMN.ATO.GEN.XML04, The element 'OrganisationName' in namespace ‘http://www.sbr.gov.au/ato/payevnt’ has invalid child element 'PersonUnstructuredNameFullNameT' in namespace ‘http://www.sbr.gov.au/ato/payevnt’. List of possible elements expected: ‘DetailsOrganisationalNameT’ in namespace ‘http://www.sbr.gov.au/ato/payevnt’. Hint: while processing parent element [OrganisationName] child mandatory element [DetailsOrganisationalNameT] was expected but not found.

If you get this error it means that the company name field has not been completed. N.B. This field is compulsory.

You will need to ensure the issue is fixed in all of the following areas:

1. The Legal Name field in the Business Details screen; 2. The Name field in the ATO Settings screen; and 3. The Name field in the Employing Entities screen (if you have employing entities set up).

Error: CMN.ATO.GEN.XML04, The element 'ElectronicContact' in namespace 'http://www.sbr.gov.au/ato/payevnt' has incomplete content. List of possible elements expected: 'TelephoneMinimalN' in namespace 'http://www.sbr.gov.au/ato/payevnt'. Hint: while processing parent element [ElectronicContact] child mandatory element [TelephoneMinimalN] was not found.

If you get this error it means that the company phone number has not been completed. N.B. This field is compulsory.

You will need to ensure the issue is fixed in all of the following areas:

1. The Contact Phone Number field in the Business Details screen; 2. The Phone Number field in the ATO Settings screen; and 3. The Contact Phone Number field in the Employing Entities screen (if you have employing

entities set up).

Error: CMN.ATO.AUTH.008, You are not authorised to submit this lodgement on behalf of the client. Link this client to your australian business number to create a business appointment or see your Auskey administrator. If the business appointment exists, your Auskey may not have access to this client.

If you are a registered tax/BAS Agent:

The error is basically stating that the tax/BAS agent is not 'connected' with the business. This cannot be rectified within the payroll system - rather it requires logging into Access Manager or the Tax/BAS Agent Portal to ensure the business is listed as a client and the agent has the sufficient permissions

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for that business to undertake the lodgement of STP. The ATO prescribe several methods of rectifying this are:

• Link the business to your registered agent number, using the client update service or the portal. In some instances, it may take overnight to process your request.

• If the link already exists, the business may be restricted in Access Manager. Contact your AUSkey Administrator to allow 'view all restricted clients' or to have the restriction for this client overridden.

• If the business is appearing on your client list and is not a restricted client, you may need to remove and re-add the business and try to lodge again.

• Your agent number must also be linked to the correct agent ABN in Access Manager. Ask your AUSkey Administrator to make any necessary changes.

If you are an intermediary for multiple employing entities:

The error is basically stating that the entity acting as the intermediary does not have the required authorisation to be the intermediary. This cannot be rectified within the payroll system - rather it requires logging into Access Manager to ensure the business is listed as a 'client' per se and the intermediary has the sufficient permissions for that business to undertake the lodgement of STP. To do this:

• Log into the the ATO Business portal with your AUSkey • Log in to the employing entities that are NOT the intermediary entity • Go to ‘Access Manager’, login, click on ‘who has access to my business’, then in the blue band

near the top ‘Appoint New Business’ • Enter the intermediary entity's details

• There is then a step to choose the access level. Under the heading ATO Transactions you will need to choose “Payroll event form” for “Lodge & View” as shown below

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Please take note of the following:

• In some instances, the linking to other businesses may take overnight to process your request. • If the link already exists, the business may be restricted in Access Manager. Contact your

AUSkey Administrator to allow 'view all restricted clients' or to have the restriction for this client overridden.

• If the business is appearing on your client list and is not a restricted client, you may need to remove and re-add the business and try to lodge again.

Error: SBR.GEN.AUTH.008, Your nomination with the software provider may not contain the correct Software ID in Access Manager. To resolve, please log on to Access Manager (AUSkey required), select ?my nominated software provider? and update the nomination, or call the ATO. You will need provide the following details: ? Software provider name and/or their ABN ? Software ID

This error should only occur if the ATO supplier settings are configured so that a registered tax/BAS agent is lodging to the ATO on behalf of the business. This relates to the correct process of enabling electronic lodgement not being completed properly. It is essential that the ATO is contacted (either by calling them or using Access Manager) to link the software ID to each ABN. To fixing this issue via Access Manager, refer to the instructions provided above for "Error: CMN.ATO.GEN.200001".

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Error: CMN.ATO.AUTH.011, A link between your client and your agent number does not exist for the selected task. Check that you have added this client to your registered agent number. You may also need to check if you have entered the correct client identifier and that you are using the correct registered agent number and try again. If the issue persists, contact the ATO quoting this error code to resolve any issues.

This error should only occur if the ATO supplier settings are configured so that a registered tax/BAS agent is lodging to the ATO on behalf of the business. Log into your Tax Agent/BAS Agent Portal and ensure the business is listed and/or is set up with the correct access. Otherwise, you will need to contact the ATO directly as this error has nothing to do with the payroll system.

Error: SBR.GEN.AUTH.005, Inform your software provider that the eb:PartyInfo/From/PartyID details does not match the entity details for this submission.

This error relates to the AUSkey not being linked to the registered agent number in Access Manager. Alternatively, your AUSkey Administrator may need to authorise your agent number for this AUSkey. If it is linked, ensure the permissions and business details are set up correctly in Access Manager.

Error: SBR.GEN.AUTH.006, You have not nominated this software provider to secure transmissions made through online (cloud based) software. To resolve, please log on to Access Manager (AUSkey required) and select ?my nominated software provider? and follow the instructions to nominate a provider, or call the ATO. You will need provide the following details: ? Software provider name and/or their ABN ? Software ID

This error means the correct process of enabling electronic lodgement has not been completed properly. It is essential that the ATO is contacted (either by calling them or using Access Manager) to link the software ID to each ABN. To fix this issue via Access Manager, refer to the instructions provided above for "Error: CMN.ATO.GEN.200001".

Employee Errors

Error: CMN.ATO.GEN.XML03, The value specified for an item does not match the item type (value = "[specific value detailed here]", item type = String, uniqueID = http://www.sbr.gov.au/ato/payevntemp:TelephoneMinimalN) Hint: The Pattern constraint failed.

This error relates to an invalid value entered in the employee's Home Phone field. Only numbers can be entered in this field. If the employee's phone number looks to be valid, we suggest deleting the number and entering it again.

CMN.ATO.GEN.XML03, The value specified for an item does not match the item type (value = "[specific value detailed here]", item type = String, uniqueID = http://www.sbr.gov.au/ato/payevntemp:Line1T) Hint: The actual length is greater than the MaxLength value.

This error will appear if the employee's postal address (Line 1) is in excess of 38 characters. To fix this ensure:

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• the suburb and postcode is not entered in Address Line 1; • Address Line 2 is also used to for multi-line addresses.

Error: CMN.ATO.GEN.XML03, The value specified for an item does not match the item type (value = "[specific value detailed here]", item type = String, uniqueID = http://www.sbr.gov.au/ato/payevntemp:TelephoneMinimalN) Hint: The actual length is greater than the MaxLength value.

This error will appear if the employee's home number is in excess of 16 characters. To fix this ensure the number entered in the employee's Home Phone field is less than 16 characters. If the employee's phone number is within the required character limit, make sure there are no spaces after the last digit. Otherwise, we suggest deleting the number and entering it again.

Error: CMN.ATO.GEN.500026, or CMN.ATO.GEN.500029 - A text character must be one of the following: A to Z a to z 0 to 9 ! @ $ % & * ( ) - _ = [ ] ; : ' " , . ? / or a space character.

This error will appear if the employee's email or residential address is invalid. Check the employee's Email and/or residential Address field/s and make the required correction. If the addresses do seem valid, ensure there are no spaces after the last character. Otherwise, we suggest re-entering the email and/or residential address again.

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Sage Business Cloud Payroll Support

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