Correcting Errors

Note: The rules for correcting JobKeeper errors are different. See JobKeeper - Changes and Corrections.



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3.2 Fix

There are times when correcting payroll reports to the ATO will be required.

3.2.1 What to fix

The fix involves a payment subject to withholding

If an additional payment is made and is subject to withholding then the employer is required to report in a pay event.

The fix involves a payment NOT subject to withholding

Payments not subject to withholding are not reportable.

Misclassification with no additional payment

A misclassification is when information has previously been reported under an incorrect salary and wage item and there is no additional payment to the employee.

Overpayment within a financial year

An overpayment is when an employer has mistakenly overpaid an employee the appropriate wages and entitlements due under the employee’s contract of employment.

Business response messages (child records)

When a data validation error message is received from the ATO after the pay event has been submitted, identifying error(s) in one or more child record.

3.2.2 When an employer needs to report a fix

1. An employer must report a fix within 14 days from when the issue is detected.

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.

3. An employer may report a fix in an update event. An update event cannot contain the W1 and W2 totals.

3.2.3 Fixing reporting errors – employee data

1. Where the latest employee information reported does not reflect the current information in the employer’s payroll system a fix should be reported.

2. This may be reported within the employee record in the next regular pay cycle report for the employee.

3. Alternatively, the information may be provided in an update event within 14 days of being identified.

4. This process also applies to the correction of employee data following from receiving a returned message with child record data validation error(s).

3.2.4 Fixing reporting errors – employer data

1. Where the latest employer information (W1 and W2) reported does not reflect the actual amounts withheld and then a correction needs to be made to those amounts.

a. For large withholders this follows the existing business process. (See ATO website)

b. For small and medium withholders, this may involve adjustments through the BAS.

i. Where the adjustment relates to a BAS which has already been lodged the employer should revise the BAS for the period (see ATO website – reporting PAYG withholding errors)

ii. Where the adjustment relates to a BAS which is yet to be lodged the employer should include this amount in the appropriate labels (W1 and W2) on the BAS. If the BAS has been pre-filled using STP data, the employer should adjust the W1 and W2 amounts.

See also this ATO link called Correcting a pay event report

STP Creator - Correcting Errors

STP Reports are required to send through 2 pieces of information:

Employee YTD Data - or what ATO refers to as 'employee data'

STP reporting by design is ‘self correcting’. What you are primarily sending through to the ATO is Payee YTD information. This information is taken from YTD information in your MYOB® file (assuming you are using MYOB®).

So if you make a mistake, or skip reporting a payroll, send a report through 5 times, your next report (which replaces all previous reports) will send through whatever is in MYOB® (or whatever payroll system you use) at that time. So if you process someone’s pay incorrectly, ensure this is fixed up in your payroll system first. If you had a STP Creator setting wrong, fix that up. Lodge your next report as normal – this will send through the correct YTD details, replacing everything you have reported previously.

So no there is no need to resubmit or send through data from a previous payrun again. Any previous errors were corrected by your most recent STP Report. If it is your most recent report that has the error, you can:

If in doubt, get an employee to check that their MyGov Income Statements shows the correct information. Ultimately this is all that matters.

Activity Statement W1 and W2 data  - or what ATO refers to as 'employer data'

This is what you see on the ATO Reports in the Business Portal - see example below:

Gross Payments are the W1 amounts reported and PAYGW are the W2 amounts reported via STP.

W1 and W2 totals for each period will be added and used to pre-fill your online Activity Statements for the relevant period. If the prefill data is incorrect, it is up to the employer to correct when they lodge their activity statement. What you put on the Activity Statement is what matters, not what you reported via STP. Any corrections should be made on your BAS, not in STP.