#TipTuesday: Why payment summaries are obsolete with STP Phase 2 in Reckon Accounts

Reeta

With the advent of Single Touch Payroll (STP) Phase 2, the landscape of payroll reporting has significantly evolved, rendering traditional payment summaries obsolete. This change is crucial for businesses and employees alike to understand, particularly when comparing STP submissions.

A shift from Payment Summaries to Income Statements

When STP Phase 1 was first rolled out in 2018, it marked the beginning of a significant transformation in how payroll information is reported to the Australian Taxation Office (ATO). The introduction of STP Phase 2 has further cemented this change. Payment summaries, also known as group certificates, have been replaced by income statements, which are accessible through an individual’s MyGov account. Employees can print their income statements directly from MyGov if a paper copy is needed.

The incompatibility of Payment Summaries with STP Phase 2

The new reporting requirements introduced under STP Phase 2 were not part of the old Payment Summary (or EMPDUPE) lodgement process. As a result, if you view a payment summary for a financial year that contains one or more STP Phase 2 lodgements, the amounts will not match. This discrepancy arises because STP Phase 2 includes additional reporting fields and more detailed information that were not captured under the previous system.

There's more info on the tax tracking changes under STP Phase 2 here - STP Phase -2 Tax tracking types

Why Payment Summaries are obsolete

1. Enhanced Reporting Requirements: STP Phase 2 includes new data fields such as income type, country codes, and more detailed breakdowns of payment types. These were not part of the old payment summary format.
   
2. Real-Time Reporting: STP submissions are made each pay cycle, providing the ATO with up-to-date information. This real-time reporting enhances transparency and accuracy compared to the annual payment summaries.
   
3. Improved Access for Employees: Income statements available through MyGov provide employees with timely access to their payroll information, eliminating the need for waiting until the end of the financial year for payment summaries.
   
4. Regulatory Compliance: Compliance with STP Phase 2 is mandatory. Continuing to use payment summaries not only creates discrepancies but also fails to meet current legislative requirements.

The role of Payroll Summary reports

For those needing detailed payroll information, payroll summary reports can be utilized. These reports can provide comprehensive employee information and can be tailored to include the specific details required under STP Phase 2. However, it is important to note that these reports should not be confused with the outdated payment summaries.

What the Payroll Summary Report report tells you:

This report provides a snapshot of your payroll. It includes each employee's total wages, tax withheld, net pay deductions and additions, and employer-paid taxes and contributions. The "Employer Taxes and Contributions" section shows the accrued amount for the report's period, paid or not. Double-click any amount to see the detailed transactions.

As for the date range, the report is set to cover this calendar quarter by default. But don't worry, you can easily change this. Just select a different date range from the "Dates" drop-down list, and the report will update accordingly.😊

Steps to Generate Payroll Summary Reports in Reckon Accounts

Navigate to the Reports Menu

- From the top menu bar, click on "Reports".

Select Employees & Payroll

- In the drop-down menu, choose "Employees & Payroll".

Choose Payroll Summary

- From the "Employees & Payroll" submenu, select "Payroll Summary".

Specify the Date Range

- A report window will appear. You need to set the date range for the report. This can be done by either selecting a preset date range (such as "This Month", "This Quarter", "This Year", etc.) or by manually entering the start and end dates.

Customize the Report (Optional)

- If you need to customize the report further, click on the "Modify Report"

button. This allows you to add or remove columns, filter data, and sort the information according to your requirements.

Run the Report

- After setting the date range and customizing the report (if needed), click on the 'OK' button to generate the report.

Review the Report

- The payroll summary report will be displayed on the screen. Review the details to ensure accuracy.

Print or Export the Report

- To print the report, click on the Print button

- To export the report to Excel or PDF, click on the Excel or PDF button respectively, and follow the prompts to save the file to your computer.

By following these steps, you should be able to generate detailed payroll summary reports in Reckon Accounts, providing you with essential information about your employee’s payroll data.

Additional Tips 😀

• Save Custom Reports:

If you frequently use a customized version of the payroll summary report, you can save the report settings for future use by clicking on "Memorize" after customizing the report. This allows you to quickly generate the same report without redoing the customization.

• Regular Updates:

Ensure your Reckon Accounts software is updated to the latest version to have access to the most recent features and fixes.

• Backup Data:

Regularly backup your company file to prevent data loss and to ensure that your payroll information is secure.

As businesses and employees navigate the evolving payroll landscape, it is crucial to understand the obsolescence of payment summaries and the importance of transitioning fully to STP-compliant reporting methods. Income statements accessible via MyGov, along with payroll summary reports, are now the standard for accurate and compliant payroll information. Ignoring this shift can lead to discrepancies and non-compliance issues, making it imperative to adapt to the new reporting requirements under STP Phase 2.

Thank you all for taking the time to go through this and learn more about the payroll summary.

Regards,

Reeta