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ATO Payment Summary/Income Statement - Service Improvement, ATO Style?

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#1

The following was received from the ATO in the last couple of days, via myGov:

Australian Taxation Office

Wait until your payment summary information is tax ready

Hi,

The way you get your payment summary information is changing.

Your end-of-year payment summary information, now called an income statement, will be available through myGov for you or your tax agent.

It’s important to wait until your employer marks your information as tax ready before your tax return is lodged. Most employers have until 31 July to do this, and we’ll send a message to your myGov Inbox when it is tax ready.

If you lodge your tax return before your income statement is tax ready, you may need to lodge an amendment. In some cases, additional tax and interest may be payable.

If you have more than one job, your other employers may still need to provide you with a payment summary. Make sure all income is included when lodging your tax return.

This change is because many employers are now required to report pay and super information direct to us each pay day. All employers will eventually report this way.

Regards,

Commissioner of Taxation

There is some more information about the ‘new’ system, called Single Touch Payroll, here.

Potential benefits? Relatively up to date summary of annual income, verification that superannuation is being paid (or is it just verification that the employer claims to have paid it?) …

Problems? My employer needs to mark my income statement as tax ready? Interesting design …

I’d have thought some new system would streamline the process, but it seems employers using it now have the whole of July to finalise the income statement, where previously it typically had to be done within 14 days of the EOFY …

From the ATO site documentation it seems this has been coming for some time, but a quick straw poll where I am suggests news of its arrival is somewhat less than well known ‘on the streets’ …


#2

One has to wonder why, if employers have to report each payday, they need to make anything ‘tax ready’ at year end. It should be tax ready every payday, should it not? That is unless they are not reporting each payday or they are submitting dodgy data and everyone knows it.

Am I missing something?


#3

In some respects, it has been going on with many employees/employers for many years…group certificate information is prefilled into the e-Tax system. I expect some SME employers haven’t been adding the information to the ATO system, which this now forces many of them to do now.

I suppose all this does is remove the need for employees to issue group certificates which are a legacy of the paper based tax returns.

I expect that employees of those businesses which aren’t computerised (yes there are still some), didn’t get the message through mygov as their employer may nit be abke to jeet this requirement.

It should create efficiencies and hopefully one day doing a full blown tax return for many will be a thing of the past. The only thinkpg which may need to be completed in the future is the deductions section…reducing costs to the employee and speeding up the tax refunds/paymebts system.


#4

I don’t think so. It’s actually no different from when we got pieces of paper. Sometimes the employer stuffs up and has to reissue or correct. You can just go ahead and lodge your tax. In the “unlikely” event that the employer has to make an amendment then you might likewise.

I think that is still the case. Deadline is July 14 for employers to lodge payment summaries with the ATO, as has been the case for some years, whether on paper or electronically. Then, apparently, the employer has further days to lock it in, as it were. I would guess that eventually that additional delay will disappear. However at the moment, for some employers at least, this is all new and quite immature - so expect problems !

Correction - Edit: Deadline is July 14 for employers to give individual payment summaries to employees. Deadline is August 14 for employers to give ATO copy to ATO. This is for the paper copies.

More accurately, super has been required to be reported electronically for some years now. It is “pay” information that is newly required to be reported electronically. Even then the ATO does not expect all employers to be ready and an employer can apply to the ATO for an extension of the deadline.

ATO doesn’t have to print and send out payment summary forms.
ATO doesn’t have to process completed forms.

You have no idea :slight_smile: or maybe you do.


#5

Hopefully one day the taxpayer will only need to provide information over and above what the ATO already has. Even now though there are stupid scenarios that are not correctly catered for by “the system” but can’t be fixed. So who knows what the future will bring.

Also the capital gains tax section unless the government simplifies and streamlines the rules regarding CGT.


#6

The joys of those saddled with American citizenship and having to deal with the ATO and IRS, as well as the many migrants who have some form of income from their native countries will always enjoy special treatment. The wonderful world of FATCA is the Americans attempt to reign in all the lost tax revenue and potentially track money laundering at sometimes significant individual cost.

Back to the ATO, a few years ago a share registry ‘credited’ me with all the dividends issued for the entire tax-year for a share I had just bought before end-of-tax-year. I received none of it but the ATO declared the registry could do no wrong and it was my problem to sort it. It became complicated enough I just paid the tax since it was not a significant amount and the value of my time and sanity prevailed.

Automation can be good as long as everybody involved gets it right. That is more probable the case for those with simple financial lives noting mine is not complex - just pensions, interest, and dividends that should be straight forward. Whether an automated system works may be in how it responds to errors, not just how it works when everything is correct and on time.


#7

That’s the kind of thing I meant by “not correctly catered for by ‘the system’ but can’t be fixed”.


#8

From the ATO site HERE

Payment summary information will also be in ATO online services

Your employer does not need to give you an end-of-year payment summary for the information they report and finalise through STP.

Your payment summary information will be called an income statement in ATO online services. This is the equivalent of a payment summary (which some people call a group certificate).

You can view this information at any time throughout the financial year – once your income statement information is finalised by your employer it will be identified as ‘Tax ready’ in ATO online services.

To complete your tax return, you should wait until the information is ‘Tax ready’.

From 1 July, your STP income statement information will be pre-filled into myTax even if your employer hasn’t finalised it yet. If your income statement information isn’t finalised yet, you will see a red box with the word ‘Required’ next to your employer’s name in myTax. You will need to review this pre-filled information and confirm whether you wish to use it before you submit your tax return.

If you choose to use information from an un-finalised income statement to lodge your tax return, you will need to acknowledge that:

  • your employer may finalise your income statement with different amounts
  • you may need to amend your tax return and additional tax may be payable.

We’ll send a notification to your myGov Inbox when your income statement is ‘Tax ready’ so you or your registered tax agent can then complete your tax return.

So it’s not quite the same - it seems we will be able to track it pay to pay, give or take a few days - and the numbers will always be there. The Employer does finalise it at which time the ATO marks it as Tax Ready, and if we use it before then it seems there will be flags to alert to its unreadyness, which is not the same as a payment summary that was finalised but then amended, though the outcome of using either would result in an amended return in the case of variation - I can imagine the ability to use the information before being finalised might either appeal to some or be a mistake some might not understand - this was not possible under the old payment summary/group certificate method - we had to wait for it to be issued, prior to that we did not have the required documentation to file … now it seems it would be possible to file before finalisation, under warning - then have to amend if it is finalised with different numbers, then when the company finds an error two months later (happened to me two years ago), amend again …

From HERE

How you get your end of financial year information from your employer showing your earnings for the year (also known as a payment summary or income statement) depends on how your employer reports your income, tax and super information to us. You will be provided with either:

  • An income statement – if your employer reports your income, tax and super information to us through Single Touch Payroll (STP) they are no longer required to give you a payment summary, this information will be made available to you through ATO online services via myGov and finalised by 31 July.
    > * A payment summary – if your employer is not yet reporting through STP they will continue to provide you with a payment summary by 14 July (as they do now).

Indeed, for paper copies (the old system we could call it) - and for STP the earliest deadline for providing finalised numbers that are ‘Tax Ready’ is 31 July. Under certain circumstances it may be longer.

True - the quote however is from the ATO, not me, and the point being made is that this information is now reported each pay - I believe previously the reporting period for superannuation for example was three months?? I am unsure of the frequency, but my understanding is that the each pay reporting of superannuation is the new thing. I am not an accountant :slight_smile:

Some rules on reporting are HERE

One good thing is this (from the link):

  • We will compare the amounts you report with information we receive from super funds. If we identify your contributions vary significantly from the liability reported, we will contact you.

That is a benefit to employees of dodgy companies. I’ve experienced this first hand with a small company that defiantly refused to pay, with a number of employees not willing to ‘rock the boat’.

There are numerous mentions on the site about extensions, but eventually it will be everyone is how I read it.

Have they ever? My experience is that group certificates and payment summaries have always been issued by the company (I’ve had to clear printer jams :wink: ) …

Which forms? our tax return (paper or online)? I reckon the ATO will still want to see them, surely? …:japanese_ogre:


#9

There was a time when that was the case (paid every 3 months and reported every 3 months). I believe it is now the situation that super has to be reported when it is paid to the super fund - via SuperStream, and that has been the situation for a couple of years. If that payment of super is each time the corresponding (or otherwise) pay is paid to the employee then the two things will line up - but that might not be the case??

You are correct that as of July 1 this year, super information will be included in the payroll information that goes to the ATO every time an employee is paid - via Single Touch Payroll. At that time, employers who have implemented this will no longer have to issue payment summaries nee group certificates.

The BAS will still contain total payroll information (for whatever is the BAS period).

It would seem that there is a fair bit of redundancy there. Roll on the surveillance state.

Once again though, the ATO does not expect all employers to be ready and an employer can apply to the ATO for an extension of the deadline. So ‘you’ may yet get a payment summary for FY20 in about one year from now.

That would be my understanding (all employers).

Most assuredly. If you go to the ATO online publications ordering site, you can view the forms.

So there is no confusion though, these are blank forms. The employer still has to fill in the forms (other than that the employer details are pre-printed on the whole-of-company payment summary summary). The actual payment summary that goes to e.g. the employee is not pre-printed with employer details. Those forms are then sent back to the ATO.

Many employers will be using a payroll system that does all this in an ATO-compliant manner and in that case the ATO does not supply the forms.

The ATO copy of the payment summary (nee group certificate) and the whole-of-company payment summary summary.

Both of these forms will cease to exist for a given employer once the employer is using Single Touch Payroll. The ATO will simply add up the information that it received during the year via STP.