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® - Card File > Cards List > Employee > Payroll Details screen. In STP Creator, after opening the Data Set file, complete Step 2 Load Payroll Data.

Next Click Step 3 Check Payees

Then Payees:

Select the Payee who was terminated and click Edit.

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 Cessation Code.

A Payee is regarded as Terminated when the STP Report shows a Termination Date and a Cessation Code - see example in image above.

If this Payee is included in subsequent STP Reports, you should continue to report the Termination Date and Cessation Code. The Termination Date comes from the MYOB company file - Card File > Cards List > Employee > Payroll Details screen, the Cessation Code is stored in the STP Creator Data Set file.

Terminated versus Finalised

A Payee with a Termination Date and Cessation Code in the STP Report 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 the YTD Amounts in this STP Report are the final figures for this Payee for this Payroll Year. When the Final Indicator is set to TRUE, the Payee's Income Statement for this Payroll Year it will show as Tax Ready on their MyGov account. All Payees must be 'Finalised' each Payroll Year - and this is normally done on or after 30 June. See EOY Procedure.

When a Payee leaves during the year, once you have processed their final payments, the Payee can then be 'Finalised' - you do not need to wait until the end of the payroll year. To Finalise a Payee who has been terminated, tick the Final Indicator check box on the Payee Details screen as shown below (red Highlight). This will ensure that whenever this Payee is included in an STP Report, the Final Indicator (at Step 6) will always be set to TRUE. You will not need to remember to do this on the Step 6 Final Data screen for this Payee.

Employee Re-commences

If the Payee re-commences, simply remove the Termination Date from the Employee Card in MYOB, remove the Cessation Code and the Final Indicator from the Payee Details screen in STP Creator.

To Include or to Exclude Terminated Payees

Once you have 'Terminated' and 'Finalised' a Payee in an STP Report, it is up to you whether you continue to Include this Payee in subsequent STP Reports, or exclude them. You only need to send the Termination Date, Cessation Code and Final Indicator once. However you can continue to include this Payee in subsequent Reports and therefore continue to report the Termination Date, Cessation Code and Final Indicator.

In the past we have found that Payees who have left during the year cause a few problems for some employers. These include:

• if the MYOB Payroll Register Summary YTD Report includes the terminated employees, and the STP Report does not, reconciling the YTD figures is harder
• at EOY the employer can't correctly remember if the Final Indicator was set to TRUE or not

To Include

To avoid any issues and to make reconciliation easier, we recommend you set a Termination Date, enter a Cessation Code (blue highlight above), set Final Indicator (red highlight above) and set "ignore Termination Date Warning (green highlight above) on the Payee Details screen, and continue to Include the Payee in subsequent STP Reports until the end of the Payroll Year. Then when you set Final Indicator = TRUE for everyone at your EOY Finalisation, all employees will be included, including those who left during the year. You then stop reporting for those employees who left is the next year - as per image below.

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 Exclude

Terminate and Finalise the Payee as outlined above. Complete the remaining steps to assemble all data as per usual, and then on the Final STP Report Data screen, check or set the Final Indicator for this Payee, ensuring it shows TRUE. Lodge this STP Report.

Update Payee record to exclude Payee from subsequent Reports

After you have submitted this STP Report, to ensure this Payee is not included in subsequent STP Reports, on the Payee Details screen set 'Incl in STP' to No and tick the 'Ignore YTD Amounts in MYOB' checkbox as per image below (red highlights):

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, Cessation Code and Final Indicator

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, Cessation Code and Final Indicator 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, check or set the Final Indicator for this Payee, ensuring it shows TRUE. 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:

Alternatively you can do this from the Payee Details screen as shown below:

This Payee will no longer be included in subsequent STP Reports.