Each time a payee’s earnings and tax withholding are reported successfully through STP, the payee’s YTD earnings and YTD tax withheld amounts are updated in their income statement (payment summary) in the myGov portal. When a payee’s employment is terminated, a final pay indicator must be reported through STP. This flags the payee’s income statement as final, which indicates that you do not expected to be making more payments. This notifies the payee that amounts reported in their income statement are unlikely to change and can therefore be used in the preparation of a part-year tax return if necessary.
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The payee has been terminated at the Termination stage in a pay batch and the pay batch is reported via STP. This will also report the employer/employee relationship as having been terminated.
The STP end of financial year process is run. This will finalise payees’ earnings for the financial year only, unless a payee has also had their employment terminated during that financial year.
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If you do make further payments to a payee whose pay has been finalised, be aware that their income statement for the corresponding financial year will update accordingly on myGov. Therefore, if you do make adjustments to a terminated payee’s earnings, it is recommended that you inform the payee that their income statement will be updated. This can be done via an automated notification. |
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If your business is shutting down a pay company part way through a financial year, it is important that you run the STP EOFY process after you have processed the last pays and have submitted the last pay batches to STP. This will ensure that payees can prefill their tax returns from 1 July after the pay company is no longer operational. |
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