Terminating an Payee (employee)
Terminating an Payee - using MYOB®
Step 1 - Set a Termination Date
If a Payee's employment comes to an end, you should set a Termination Date in the Employee's Card in MYOB®. In STP Creator, after opening the Data Set file, from the Permanent Data Set screen, click the Load Current Payroll Data from MYOB® file (as per image below):
Then click Payees:
and then Update from Company File:
and then Check All STP Payees:
The Payee Details screen for this payee will now show the Terminated Date. You will need to add a Cessation Code here.
If unsure what Cessation Code to use, see the link on the Payee Details screen.
Terminated versus Finalised
At this point the Payee will show as a Termination Date in the STP Report. This Payee is 'Terminated', however they are not yet Finalised. There is a difference. With STP Reporting, 'Finalised' means we have sent a Final Indicator = TRUE and this STP Report is the final for this Payee for this Payroll Year - and their Income Statement it will show as Tax Ready on their MyGov account. We must do this for each Payee, and this is normally done on or after 30 June. See EOY Procedure.
Finalise now or Later
Payees who have left during the year cause a lot of problems for some employers at year end. To avoid any issues and to make reconciliation easier, we recommend you Terminate, but not Finalise. This means the Payee continues to be reported with a Termination date in each of your STP Reports until the end of the year. Then you set Final Indicator = TRUE for everyone at your EOY Finalisation. You then stop reporting for this employee next year.
The advantages of this approach include:
- When checking STP Reports with MYOB reports, the figures should always agree as the number of employees in both will match
- At End of Year Finalisation, you can be confident the Income Statements for all Payees will show as Tax Ready.
Disadvantages include:
- If you have high staff turnover, you may exceed your reporting Payee Limit in STP Creator
- If reporting by SSP, your monthly fees may be higher
To Finalise Later
To keep reporting and avoid a Termination Date warning, on the Payee Details screen, tick the checkbox highlighted below:
Continue to report as per usual. There is no need to keep going with Steps 2 an onwards.
To Finalise Now
Step 2 - Assemble STP Data and set Final Indicator
Complete steps 2 to 6 to assemble all data as per usual, and then on the Final STP Report Data screen, set the Final Indicator for this Payee. Lodge this STP Report.
Step 3 - Update Payee record to exclude Payee from subsequent Reports
After you have submitted this STP Report, ensure this Payee is not included in subsequent STP Reports. This is done from the Payees screen, select the Payee and click 'Edit'. On the Payee Details screen set 'Incl in STP' to No and tick the 'Ignore YTD Amounts in MYOB' checkbox as per image below:
This Payee will no longer be included in STP Reports. And you do NOT need to again send a Final Indicator = TRUE at the end of the Payroll Year.
Note: When you exclude an employee from subsequent reports, be sure to also exclude them from your MYOB® reports when checking YTD amounts on the final screen. Click the Customise button as highlighted below to select just those employees who you are currently reporting on for STP. After you generate the Report click Save As and save this report as shown below. This will then appear under Custom Reports and save you having customise in future.
Terminating an Payee - not using MYOB®
Step 1 - Set a Termination Date
The procedure for non MYOB® users is very similar to that for MYOB® users. The only difference is how to set the Termination Date.
Set the Termination Date and Cessation Code manually by editing the Payee Details from the Payees screen as per image below:
Step 2 - Assemble STP Data and set Final Indicator
Assemble all data as per usual, and then on the Final STP Report Data screen, set the Final Indicator for this Payee. Lodge this STP Report.
Step 3 - Update Payee record to exclude Payee from subsequent Reports
After you have submitted this STP Report, ensure this Payee is not included in subsequent STP Reports. This is done from the Payees screen, select the Payee and click 'Exclude from STP' as per image below:
This Payee will no longer be included in STP Reports.