STP Key Concepts and Employer Obligations

(from the ATO's Business Implementation Guide)

Pay Event (Submit)

Whenever a payer makes a payment to a payee that is subject to withholding they are required to lodge a Pay Event with the ATO on or before the date the payment is made. This includes where the:

• Frequency of the payments includes regular cycles (planned) or out of cycle payments (unplanned)
  
  
• Amount of withholding is nil (for example: where the payee gross income is below the tax-free threshold)
  
  
• Payee has no net pay (for example: where the payee is repaying an advance or overpayment to the payer, voluntarily foregoing their net pay).
  
  

There are some circumstances when a payment may be reported after the date it has been paid.

The Pay Event includes payee identity, employment conditions, YTD payments, tax withheld, deductions and superannuation entitlement information for each individual payee reported.

As payee amounts are YTD, once an amount has been reported, it should continue to be reported, even if it has not changed. For example; if the employee is included in any subsequent Pay Events, ETPs should continue to be reported in each Pay Event after they are first reported.

The Pay Event may also include payees not in the pay run, to address any other payee reporting fixes.

The Pay Event also includes the Payer Total Amounts (not YTD) of all payees reported in the Pay Event, for gross salary or wages (BAS label w1) and PAYG withholding (BAS label w2).

The Pay Event is used to lodge an STP Report with the ATO whenever a payer makes a payment to a payee that is subject to withholding. To satisfy the STP reporting obligation of the payer it must:

• Be lodged on or before the date the payment is made
  
  
• Supply Payer Total Amounts (not YTD)
  
  
• Contain at least one payee record with YTD payments, tax withheld and superannuation entitlement information.

Update Event

An Update Event reports payee identity, employment conditions, YTD payments, tax withheld, deductions and superannuation entitlement information for each individual payee reported. It cannot only include the values that have changed. It is used to:

• Align the latest payer BMS data with the payee data reported to the ATO

• Assist with EOFY processes, including finalisation
  
  

• Amendments to STP prior finalised years.
  
  

An Update Event may only be used in circumstances other than when the payee is paid. After 30 June, any changes made to reported payee data for the prior financial year must only be sent through the Update Event.

As there is no associated payment to the payee when changes are reported via an Update Event, an Update Event cannot be used to supply Payer Total Amounts (not YTD).

Sn Update Event allows the payer to report changes to payee YTD amounts previously reported in a Pay Event or an earlier dated Update Event.

An Update Event must be used:

• To replace key indicators by advising previous Business Management System (BMS) Id/Payroll Id
  
  
• To lodge prior year amendments for payees
  
  
• Only in circumstances other than when the payee is paid, unless the correction is included in a Pay Event.
  
  

An Update Event cannot be used to report or correct the Payer Period Totals - these should be corrected via the Activity Statement.