🇦🇺 Finalizing Your Australian Financial Year (STP)

Applies to: Australian Customers
Last updated: May 2025
Deadline: 14 July (employers must finalize by this date to the ATO)

Australian End Of Year Tax reporting STP Cheat Sheet

🎯 Understanding STP Basics

What Changed with Single Touch Payroll:

💡 In simple terms: STP reports payroll data every pay run. At year-end, you just tell the ATO "this data is complete and correct" by setting a "Final Indicator."

✅ Before You Begin

📋 Pre-Flight Checklist

[ ] Wait until 1 July to start (critical timing)

[ ] All pay runs for the tax year are complete (1 July – 30 June)

[ ] Payroll reconciliation is finished

[ ] FBT information entered (if applicable)

🕐 Why Wait Until 1 July?

If you start the finalization process before 30 June, only pay runs up to that date will be included. The system uses the current date, so starting on 29 June would miss any final payments.

🧭 Step-by-Step Process

Step 1: Complete & Reconcile All Pay Runs

Navigate to reconciliation reports:

📍 Payroll Admin > Pay Reports > Employee Pay Summary

What to reconcile:

• Salary/wages totals
• PAYG tax withholdings
• Allowances
• Termination payments
• Superannuation contributions

🚨 Critical STP V2 Change

The "Gross Pay" column is NOT your employee's total gross pay anymore, this has now been broken down into the various reporting categories and is reflected across different Column headings on the different Tabs displayed on the Update Event.

Important Note: The Gross Pay amount is inclusive of the Salary Sacrifice amount.

Example:  Employees Gross Pay $3,800 minus Salary Sacrifice -$300 = Total Taxable Gross $3,500

The Update Event will show: 
Gross Pay as $3,800 and Salary Sacrifice as $300

On the Employees ATO Portal the Income Statement will show:
Gross Pay $3,800 
Sal Sac -$300
Total Gross Amount $3500.

For detailed reconciliation:

📍 Payroll Admin > FAQ & Troubleshooting > PR Classification Payslip Detail report

• Use filters for Tax Year/Pay Day Date range

💡 Pro Tip: Use the "Export to Excel" button on the Update Event screen for easier reconciliation.

Step 2: Enter FBT Information (if applicable)

📍 Payroll Admin > Payroll Records > FBT Summary

🔹 Add FBT records for employees who received reportable benefits
🔹 Note: Employees only appear in the update event if their reportable FBT exceeds the threshold
🔹 If no FBT applies, skip to Step 3

📎 Need help? See: How to add Employee FBT guide

Step 3: Prepare and Submit Final Update

3a. Open the Update Event Screen

📍 Payroll Administration tab > Australia > STP: Send Update Pay Event (Select your branch if you have multiple locations)

3b. Select Correct Tax Period

If today's date is 1 July or later, you must select the previous tax year from the dropdown (e.g., "2025-26"). The page will refresh and show transaction date as 30/6/2026.

Note: Dependent on your settings, you see this either in the new redwood design or the classic NetSuite interface like shown here.

3c. Review All Tabs for Reconciliation

The Update Event screen has multiple tabs due to STP V2's disaggregated reporting:

Update Event screen is showing multiple tabs - Overview, Remuneration, ETP, Paid Leave, Allowances, Other Allowances, Salary Sacrifice, Lump Sum, Deduction, Super Entitlement, REB Exemption

Note: Dependent on your settings, you see this either in the new redwood design or the classic NetSuite interface like shown here.

📋 Key tabs to review:

• Overview: Employee employment details
• Remuneration: Broken-down gross pay components
• Allowances & Other Allowances: Note that Other Allowances also appear under main Allowances tab (not double-reported)
• Deductions: Tax, super, other deductions
• Super Entitlement: Superannuation liability amounts

⚠️ Important: The information shown depends on how your payroll codes are configured.

Step 4: Fix Validation Errors

4a. Check for Validation Warnings

Look for this type of error message:

4b. Identify Employee Specific Issues

Note: Dependent on your settings, you see this either in the new redwood design or the classic NetSuite interface like shown here.

🔍 Hover your cursor over the warning ⚠️ symbol next to employee names to see error details.

4c. Common Validation Errors

• Missing or incorrect employee details (TFN, address)
• Incorrect ABN format
• Unbalanced superannuation contributions
• Missing employment start/end dates
• Invalid pay codes or classifications

🛑 You cannot proceed if validation errors exist - the "Finalize All For Tax Period" button will be greyed out.

📎 Detailed help: Understanding Data Validation (STP) guide

Step 5: Finalize and Submit

5a. Finalize All Employees

Once validation is clean, click "Finalize All for Tax Period"

This will:

• Include all employees in the update
• Check the "Finalize Tax Year" boxes for everyone
• Show confirmation dialog

5b. Accept Declaration and Submit

1. ✅ Check the Declaration checkbox after reading the terms
2. 🚀 Click "Send Now" to submit to the ATO

This initiates the background process to generate and submit your Pay Event data.

5c. Monitor for Success Confirmation

You'll receive an email confirmation when the ATO successfully processes your submission:

📧 Success Email Example:

Subject: STP Pay Event PayEvent PAYEVNT0110: Complete Full Success

The following STP Pay Event is now complete and no further action is necessary.

Pay Event: PAYEVNT0110
Submission Type: Update  
Organization: [Your Company Name]
Period End Date: 30/6/2024
Number of Records: [X]

Step 6: Repeat for Multiple Branches

If you operate multiple branches, repeat Steps 3-5 for each branch separately.

Each branch must be finalized individually through the same process.

🧾 What Employees Will See

Employees access their Income Statement (replaces Payment Summary) via myGov:

📎 Employee guide: How employees access their Income Statement

⚠️ Common Pitfalls & Troubleshooting

🕒 Starting Too Early

❌ Problem: Starting before 30 June excludes later pay runs
✅ Solution: Always wait until 1 July or later

🔧 Need to Make Corrections After Finalizing?

If you've already finalized but need changes:

1. 📍 Go to STP: Send Update Pay Event
2. ✅ Check the Update checkbox for affected employees
3. ❌ Uncheck "Finalize Tax Year" for those employees
4. 🚀 Click Send Now (this clears their final status)
5. 🛠️ Make your corrections in the payroll
6. 🔄 Re-run the finalization process

⚠️ Why this matters: Clearing the final indicator prevents incorrect data from being used for tax pre-fill.

📊 Reconciliation Not Balancing?

• Remember: STP V2 splits gross pay across multiple tabs
• Check all tabs in the Update Event screen
• Use "Export to Excel" for easier analysis
• Verify your payroll code configuration

🏢 Can't Find Update Event Screen?

Look for: Payroll Administration tab > Australia > STP: Send Update Pay Event

• Make sure you select the correct branch if applicable
• If the menu option is missing, check your STP registration status

❓ Frequently Asked Questions

Q: Has STP Phase 2 changed the finalization process?
A: No, the finalization process is the same, but reconciliation is more complex due to disaggregated gross reporting.

Q: My last pay run is dated 1 July — will it be included in this tax year?
A: No, only pay runs with payment dates on or before 30 June count for the current tax year. Pay runs dated 1 July belong to the new tax year.

Q: I already set final indicators in my last pay run — do I still need to send an update?
A: Technically no, but it's worth running the update process to ensure no employees were missed (e.g., terminated staff not on the final pay run).

Q: Where can I see what data was sent to the ATO?
A: The ATO Business Portal shows high-level pay event information, but doesn't break down individual employee details. Use ZonePayroll's Update Event screen for detailed review.

Q: What if I have employees who only received FBT (no regular pay)?
A: They'll still appear in the update event if their reportable FBT amount exceeds the threshold.

Q: I can't find the final indicator checkbox anymore?
A: The process now uses a "Finalize All for Tax Period" button instead of individual checkboxes — it's simpler and ensures no one is missed.

🔗 Related Resources

• Understanding STP Reporting Guide
• How to Add Employee FBT
• Data Validation Errors (STP) Troubleshooting
• Employee Guide: Accessing Income Statements

🏁 Completion Checklist

[ ] All pay runs reconciled and finalized

[ ] FBT information entered (if applicable)

[ ] Update Event sent successfully for all branches

[ ] Success email received from ATO

[ ] PayEvent Record shows "Submission Successful"

[ ] Employees notified they can access Income Statements via myGov
 

🎉 Congratulations! Your end-of-year STP finalization is complete. The ATO now knows your payroll data is final and complete for the tax year.