However, even with STP, the end of financial year requires some additional work managing ‘Final Event Indicators.’ Being aware of your obligations will help you avoid penalties from the Australian Taxation Office (ATO).
Don’t let the name fool you - a Final Event Indicator is not exclusively for use with terminated employees; it is a requirement for each employee, every financial year.
Submitting a Final Event Indicator for an employee tells the ATO that you no longer intend to submit any further STP data for that employee for the remainder of the relevant financial year. This finalisation declaration tells the ATO that the STP data you have submitted can be used to pre-fill the employee’s income tax return.
If you fail to make a finalisation declaration you may face penalties from the ATO and/or be required to submit a Payment Summary Annual Report.
When do I submit a Final Event Indicator for an employee?
A finalisation declaration must be submitted for each employee before 14 July.As a special consideration for the first year of Single Touch Payroll submissions, employers who began STP reporting in the 2018/19 financial year must make finalisation declarations for all employees they have paid in the financial year before 31 July 2019. In subsequent years, employees must be finalised by 14 July.
How does Sybiz Visipay help me manage Final Event Indicator submissions?
If you are reasonably certain that everything is in order when you submit your last pay event(s) for the financial year then you can include the Final Event Indicator with your final Pay Event submission for the financial year. This can be done by clicking the check box in the 'F' column next to each employee you wish to finalise.Alternatively, you can use the Employee Income Statement event type available under the Event Options section of the STP Transfer screen.
The Employee Income Statement is a specialised Sybiz Visipay Update Event designed to make it easy to complete your finalisation declaration.
This will tick the Final Event Indicator box for all employees you have paid during the current financial year. After choosing the Employee Income Statement option, you will see the ‘F’ column filled in for all employees. Simply click the check box at the top of the column to the right of the 'F' column to select all employees, then check the box at the bottom of the window to affirm your declaration, then submit.
Even if you’ve already submitted a Final Event Indicator for terminated employees throughout the year it is recommended that you include them in this process.
Can I reverse a finalisation declaration?
If you've prematurely flagged the Final Event Indicators at year end then you must use an Update Event to uncheck the flags, then a further update event to reinstate them when you are ready (prior to the deadline).For further advice on changing or resubmitting Final Event Indicators, consult the Australian Tax Office website.
What if I’ve rolled the year prior to submitting Final Event Indicators?
The ATO Transfer Prior Year button just below the ATO Transfer button on the ribbon bar can be used in this case.What if I want to give my employees a Payment Summary?
Some employees may request a Payment Summary because they’ve come to expect it at the end of the financial year. There is no need to provide employees with Payment Summaries but if you choose to do so, simply uncheck the ‘Active’ flag under Options > Tax Details > Single Touch Payroll. You can then use the same ATO Transfer buttons as you do for STP, as they will revert to the old Payment Summary process.In the event that you neglected to submit Final Event Indicators on time and need to submit the Payment Summary Annual Report you can follow this same process.
Remember to switch the Single Touch Payroll ‘Active’ flag back on once complete.
Take a look at more information on Sybiz's Single Touch Payroll solution.
