Finalising Pay During a Financial Year

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.

In FastTrack360 a final pay indicator will be sent for a payee if either of the following applies:

• 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.

Therefore, if a payee who is no longer actively employed by your business, but has not had their employment formally terminated, requests to have their final income statement available prior to the end of the financial year, it will be necessary to terminate the payee in a pay batch and then the pay batch must be submitted through STP. That includes company contractors with a voluntary withholding agreement.

The payee does not necessarily need to receive a payment at the Termination pay batch stage to have the final pay indicator sent when they are reported through STP. For example, if the payee is not eligible to receive a Lump Sum A, Lump Sub B or Lump Sum D payment, only the employment end date and termination reason needs to be specified.

You can still make payments to a payee whose employment has been terminated and has had their pay finalised (in FastTrack360 payments to terminated payees can only be made in an adjustment pay batch). Each time you pay a terminated payee and then submit the corresponding pay batch via STP, the final pay indicator will continue to be reported each time, with any additional payments being treated as adjustments to the payee’s final pay.