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THIS IS A WIP PAGE

Introduction

Synergetic now supports the latest version of Single Touch Payroll (STP2). Our developers have worked hard to automate the transition to STP2, but you must check that payroll is configured correctly and update pay and taxation data to ensure it conforms to the STP2 specification.


Checking that payroll is configured correctly

In this section you will check the following areas of Synergetic to ensure STP2 is correctly configured:

Important: You need to be running the version v70.x or later. Please contact Synergetic Support if you have not upgraded to this version.

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paycodemaint
paycodemaint

Pay Code Maintenance

Pay Code Maintenance has been updated to support grouping pay by income stream with the addition of new reporting categories designed to split up gross pay into amounts for:

  • gross
  • paid leave
  • allowances
  • overtime
  • bonuses and commissions
  • directors' fees
  • lump sum W (return to work)
  • salary sacrifice.

Note: The ATO refers to this change as the "disaggregation of gross". For more information, see the following page from the ATO website: Expanding Single Touch Payroll Phase 2.

Additional reporting categories for deductions and superannuation have also been added. In this section , we will show you how to configure pay codes for all these new amounts.

Note: Deductions and 

  • deduction pay codes
  • superannuation pay codes

If you have employees who are paid under a non salaries and wages (SAW) income stream you will need to ensure pay codes specific to that income stream(s) have been configured.

Expand
titleConfiguring allowance pay codes

Pay codes are required for the following allowance types:

  • QN (Qualifications/Certificates)
  • KN (Tasks)
  • TD (Tool Allowances).

To create the allowance pay codes:

  • Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
  • Click New.
    • Enter the following details for the allowance pay code:
    - Pay code (e.g. ALLOWQUAL)
    - Description (e.g. Allowance - Qualifications and Certificates)
    - Short description (e.g. Allowance - Qualifications).
  • Select Allowance - Taxable from the Pay Code Type drop-down list.
    • Select the income stream type using the Income Stream Type drop-down list.
    Note: Salary and Wages is selected by default. Select another income stream type if necessary.
    Select one of the following options from the Reporting category drop-down list:
    - Allowance - Qualifications/Certificates
    - Allowance - Tasks
    - Allowance - Tools.
  • Click Finish.
  • Select an appropriate general ledger code from the Code drop-down list. 
  • Click Change on the Pay Code Selector window.
  • Repeat steps 2 to 9 until pay codes have been created for all the new allowances. 
    • Expand
    titleConfiguring paid leave pay codes

    Pay codes are required for each for the following paid leave types:

    • C (Cash out of leave in service)
    • U (Unused leave on termination)
    • P (Paid Parental Leave)
    • W (Workers’ Compensation)
    • A (Ancillary and Defence Leave)
    • O (Other Paid Leave).

    To create the paid leave pay codes:

  • Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
  • Click New.
    • Enter the following details for the paid leave pay code:
    - Pay code (e.g. PAIDLC)
    - Description (e.g. Paid Leave - Cash Out of Leave in Service)
    - Short description (e.g. Paid Leave - Cash Out).
  • Select Normal payment from the Pay Code Type drop-down list.
    • Select the income stream type using the Income Stream Type drop-down list.
    Note: Salary and Wages is selected by default. Select another income stream type if necessary.
  • Select Paid Leave using the Reporting Category drop-down list.
  • Click Finish.
    • Select the relevant paid leave type for the pay code using the Default Paid Leave Type drop-down list.
    Note: The Default Paid Leave Type drop-down list is not displayed until Paid Leave using the Reporting category drop-down list.
  • Select an appropriate general ledger code using the Code drop-down list.
  • Enter pay details using the Pay area fields.
  • Click Change on the Pay Code Selector window.
  • Repeat steps 2 to 11 until pay codes have been created for all the paid leave types.
    • Expand
    titleConfiguring an overtime pay code

    A pay code is required for overtime payments.

    To create an overtime pay code:

  • Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
  • Click New.
    • Enter the following details:
    - Pay code (e.g. OTIME)
    - Description (e.g. Overtime pay)
    - Short description (e.g. Overtime).
  • Select Normal payment from the Pay Code Type drop-down list.
    • Select the income stream type using the Income Stream Type drop-down list.
    Note: Salary and Wages is selected by default. Select another income stream type if necessary.
  • Select Individual - Gross Overtime using the Reporting Category drop-down list.
  • Click Finish.
  • Select an appropriate general ledger code using the Code drop-down list.
  • Click OK.
    • Expand
    titleConfiguring a bonuses and commissions pay code

    To configure a bonuses and commissions pay code:

    Select Module >

    update pay codes to ensure each pay code has a valid income stream type and reporting category.



    Expand
    titleConfiguring allowance pay codes

    To configure allowance pay codes:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Click New.
    3. Enter the following details:
      - Pay code (e.g. BONUS)
      - Description (e.g. Bonuses and commissions)
      - Short description (e.g. Bonuses).
      Select Normal payment from the Pay Code Type drop-down listSearch for pay codes used for either:

      - Qualification/Certificate allowances
      - Task allowances
      - Tool allowances.

    4. Select a pay code in the Pay Code Selector window.
    5. Select the income stream type using the Income Stream Type drop-down list.

      Note: Salary and Wages is selected by default. Select another income stream type if necessary.

    6. Select Individual - Gross Bonuses and Commissions using one of the following options from the Reporting Categorycategory drop-down list.
    7. Click Finish.
    8. Select an appropriate general ledger code using the Code drop-down list.
    9. Click OK.:

      - Allowance - Qualifications/Certificates
      - Allowance - Tasks
      - Allowance - Tools.

    10. Click OK.
    11. Repeat steps 3 to 6 to update the remaining pay codes for the current allowance type.
    12. Repeat steps 2 to 7 to update additional pay codes for the remaining allowance types. 


    Expand
    titleConfiguring a directors' fees pay codepaid leave pay codes

    To configure a directors' fees pay codepaid leave pay codes:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Click New.
    3. Enter the following details:
      - Pay code (e.g. DIRECTFEES)
      - Description (e.g. Directors' Fees)
      - Short description (e.g. Directors' Fees).
      Select Normal payment from the Pay Code Type drop-down listSearch for all pay codes used for paid leave at your organisation.
    4. Select a pay code in the Pay Code Selector window.
    5. Select the income stream type using the Income Stream Type drop-down list.

      Note: Salary and Wages is selected by default. Select another income stream type if necessary.

    6. Select Individual - Gross Directors' Fees using Paid Leave using the Reporting Category drop-down list.
    7. Click Finish.
    8. Select an appropriate general ledger code using the Code drop-down list.
    9. Click OK.
    Expand
    titleConfiguring a return to work pay code

    To configure a return to work pay code:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Click New.
      3. Enter the following details:
      - Pay code (e.g. RTWPAY)
      - Description (e.g. Return to Work Payment)
      - Short description (e.g. Return to Work).
    3. Select Normal payment from the Pay Code Type drop-down list.
    4. Select the income stream type using the Income Stream Type drop-down list.
      Note: Salary and Wages is selected by default. Select another income stream type if necessary.
      Select Return to Work using the Reporting Category Select the relevant paid leave type for the pay code using the Default Paid Leave Type drop-down list. You can select:
       
      - C - Cash out leave in service
      - U - Unused leave on termination
      - P - Paid parental leave
      - W - Workers' compensation
      - A - Ancillary and defence leave
      - O - Other paid leave

      Note:       The Default Paid Leave Type drop-down list is not displayed until Paid Leave using the Reporting category drop-down list.

    5. Click Finish OK.
    6. Repeat steps 3 to 7 for the remaining paid leave pay codes.


    Creating a superannuation salary sacrifice pay code

    A pay code is required for the S (Superannuation) salary sacrifice type. This pay code is used for salary sacrifice payments into employee superannuation funds.

    To create a superannuation salary sacrifice pay code
    Expand
    titleConfiguring salary sacrifice pay codes
    overtime pay codes

    To configure overtime pay codes:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Click New.
    3. Enter the following details:
      - Pay code (e.g. SUPSALSAC)
      - Description (e.g. Super - Salary Sacrifice)
      - Short description (e.g. Super Sal Sac).
      Select Superannuation - Salary Sacrifice from the Pay Code Type drop-down listthe Main menu.
    4. Search for pay codes used for overtime at your organisation.
    5. Select a pay code in the Pay Code Selector window.
    6. Select the income stream type using the Income Stream Type drop-down list.

      Note:       Salary and Wages is selected by default. Select another income stream type if necessary.

    7. Select Salary Sacrifice - Super using Individual - Gross Overtime using the Reporting Category drop-down list.
    8. Click Finish.
    9. Select an appropriate general ledger code from the Code drop-down list. 
    10. Type a factor into the Factor field to define the salary sacrifice amount as a percentage of employee pay (e.g. type 0.05 for 5%).

    Configuring a benefits salary sacrifice pay code

    A pay code is required for the O (Other Employee Benefits) salary sacrifice type. This pay code is used when salary is sacrificed for reasons other than superannuation (e.g. gym membership).

    To configure a benefits salary sacrifice pay code:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Click New.
    3. Enter the following details:
      - Pay code (e.g. OTHSALSAC)
      - Description (e.g. Other - Salary Sacrifice)
      - Short description (e.g. Other - Sal Sac).
      Select Deduction - Pre-Tax (Non-superannuation) from the Pay Code Type drop-down listOK.
    4. Repeat steps 2 to 6 for the remaining overtime pay codes.


    Expand
    titleConfiguring bonuses and commissions pay codes

    To configure bonuses and commissions pay codes:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Search for pay codes used for bonuses and commissions at your organisation.
    3. Select a pay code in the Pay Code Selector window.
    4. Select the income stream type using the Income Stream Type drop-down list.

      Note: Salary and Wages is selected by default. Select another income stream type if necessary.

    5. Select Individual - Gross Bonuses and Commissions using the Reporting Category drop-down list.
    6. Click OK.
    7. Repeat steps 2 to 6 for the remaining bonus and commission pay codes.


    Expand
    titleConfiguring directors' fees pay codes

    To configure directors' fees pay codes:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Search for pay codes used for directors' fees at your organisation.
    3. Select a pay code in the Pay Code Selector window.
    4. Select the income stream type using the Income Stream Type drop-down list.

      Note: Salary and Wages is selected by default. Select another income stream type if necessary.

    5. Select Salary Sacrifice - Other using Individual - Gross Directors' Fees using the Reporting Category drop-down list.
    6. Click Finish OK.
    7. Select an appropriate general ledger code using the Code drop-down list.
    8. Type a negative amount into the Amount field.
    Configuring existing salary sacrifice superannuation
    1. Repeat steps 2 to 6 for the remaining directors' fees pay codes.


    Expand
    titleConfiguring return to work pay codes

    To configure existing salary sacrifice superannuation return to work pay codes:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Select Superannuation - Salary Sacrifice from the Pay Code Type drop-down list.
    3. Click OKSearch for pay codes used for return to work payments at your organisation.
    4. Select a pay code in the Pay Code Selector window.
    5. Select the required income stream type using the Income Stream Type field drop-down list.

      Note: Salary and Wages is selected by default. Select another income stream type if necessary.

    6. Select Reportable Employer Super Contribution from Return to Work using the Reporting Category drop-down list.
    7. Click OK.
    8. Repeat steps 4 2 to 6 for the remaining return to work pay codes.


    Configuring child support deduction pay codes

    Pay codes are required for:

    • Child support deductions
    • Child support garnishee deductions. 
    To configure child support deduction
    Expand
    titleConfiguring deduction pay codes
    salary sacrifice pay codes

    To configure salary sacrifice pay codes:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Click New.
    3. Enter the following details for the child support deduction pay code:
      - Pay code (e.g. CHILD)
      - Description Search for pay codes used for either:

      - superannuation salary sacrifice
      - other salary sacrifice arrangements (e.g. Directors' Fees)
      - Short description (e.g. Directors' Feesgym membership).

    4. Select Deduction - After-Tax (Non-superannuation) from a pay code in the Pay Code Selector window.
    5. Select the income stream type using the Income Stream Type drop-down list.
      Select one of the following options
      Note: Salary and Wages is selected by default. Select another income stream type if necessary.

    6. Select an option from the Reporting categoryCategory drop-down list. You can select either:

      - Deduction - Child Support
      - Deduction - Child Support Garnishee.
    7. Click Finish.
    8. Click Change on the Pay Code Selector window Salary Sacrifice - Super for pay codes used for superannuation salary sacrifice
      - Salary Sacrifice - Other for pay codes used for other salary sacrifice arrangements (e.g. gym membership).

    9. Click OK.
    10. Repeat steps 3 to 6 to update the remaining pay codes for the current salary sacrifice type.
    11. Repeat steps 2 to 7 to update additional pay codes for the remaining salary sacrifice type. 


    existing pre
    Expand
    titleConfiguring
    deduction pay codes

    Pre-tax deduction pay codes

    Pre-tax deduction pay codes require an income stream type. By default, the Income Stream Type field in Pay Code Maintenance is automatically populated with the Salary and Wages (SAW) income stream type, so you will need to update any pay codes that need a different income stream type (e.g. Closely Held Payees). 

    To configure pre-tax deduction pay codes:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Select Deduction - Pre-Tax (non-superannuation) from the Pay Code Type drop-down list.
    3. Click OK.
    4. Select a pay code.
    5. Select the required income stream using the Income Stream Type field field.

      Note: Salary and Wages is selected by default. Select another income stream type if necessary.
    6. Repeat steps 4 and 5 for additional pay codes as necessary. 

    Configuring existing after-tax deduction pay codes

    After-tax deduction pay codes do not require an income stream type. You need to check that the Income Stream Type field is blank for all pay codes with the Deduction - After-tax (non-superannuation) pay code type.

    To configure after

    After-tax deduction pay codes:

  • Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
  • Select Deduction - After-Tax (non-superannuation) from the Pay Code Type drop-down list.
  • Click OK.
  • Select a pay code.
    • Ensure

    After-tax deduction pay codes do not require an income stream type. You need to check that the Income Stream Type field is blank

    .
  • Repeat steps 4 and 5 for the remaining pay codes. 
    • Expand
    titleChecking whether superannuation pay codes are correctly configured

    Configuring a reportable employer super contribution pay code

    To configure a reportable employer super contribution pay code:"for all pay codes with the Deduction - After-tax (non-superannuation) pay code type.

    To configure after-tax deduction pay codes:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Click New.
    3. Enter the following details:
      - Pay code (e.g. RESC%5)
      - Description (e.g. Reportable Employer Super Contribution 5%)
      - Short description (e.g. RESC 5%).
      Select Superannuation - Employer Contributed from Select Deduction - After-Tax (non-superannuation) from the Pay Code Type drop-down list.
    4. Click OK.
    5. Select Reportable Employer Super Contribution using the Reporting Category drop-down list.
    6. Click Finish.
    Checking employee voluntary after-tax and employer contributed superannuation pay codes
    1. a pay code.
    2. Ensure that the Income Stream Type field is blank.
    3. Repeat steps 4 and 5 for the remaining pay codes. 


    Expand
    titleChecking whether superannuation pay codes are correctly configured

    The following pay codes do not require an income stream type:

    • Superannuation - Employee Voluntary After-Tax
    • Superannuation - Employer Contributed.

    You need to check that the Income Stream Type field is blank for all pay codes with either of these pay code types.

    To check employee voluntary after-tax and employer contributed pay codes:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Select Superannuation - Employee Voluntary After-Tax from the Pay Code Type drop-down list.
    3. Click OK.
    4. Select a pay code.
    5. Ensure that the Income Stream Type field is blank.
    6. Repeat steps 4 and 5 for the remaining pay codes.
    7. Click Criteria.
    8. Select Superannuation - Employer Contributed from the Pay Code Type drop-down list.
    9. Repeat steps 3 to 6.


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    lookupfinance
    lookupfinance

    Lookup Table Maintenance - Finance

    Finance lookup tables have been updated to supported new tax scales and valid employee termination reasons defined by the Australian Government.

    You will need to check the:

    • luPayrollTerminationReason lookup table to ensure Australian Government cessation codes are correctly mapped to Synergetic lookup table records.
    • luPayrollTaxationRate lookup table to familiarise yourself with the new tax scales and understand how they relate to the previous tax scales. 



    Expand
    titleChecking whether valid termination reasons are mapped using the luPayrollTerminationReason lookup table

    Employee terminations must be reported using Australian Government cessation codes. These cessation codes are mapped to termination reasons using the ExternalSystemType and ExternalSystemCode fields of the luPayrollTerminationReason lookup table.

    Note: Synergetic maps the cessation codes during installation, but the mapping must be checked to ensure it is correct.



    Expand
    titleChecking whether STP2 tax scales are loaded into the luPayrollTaxationRate lookup table

    Tax scales have been updated to use a four character code that combines with additional fields on the Tax tab of Payroll Employee Maintenance (see below) to define the tax treatment of each employee.

    These tax scales can be viewed using the luPayrollTaxationRate lookup table. We recommend checking this lookup table to familiarise yourself with the new tax scales and understand how they relate to the previous tax scales (see the LegacyTaxScale field).


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    payempmaint
    payempmaint

    Payroll Employee Maintenance

    Payroll Employee Maintenance has been updated to support new employee taxation fields and termination reasons.

    You will need to check the:

    • General tab to ensure valid termination reasons are selected for employees terminated during the 2022 Payroll Year
    • Tax tab to ensure employee taxation details have been correctly converted.



    Expand
    titleChecking whether valid termination reasons are selected for employees

    Employees terminated during the 2022 payroll year must be terminated using termination reasons linked to the new Australian Government cessation codes. We have already mapped the records of the luPayrollTerminationReason lookup table to the new cessation codes, so now we will select a valid reason for each terminated employee on the General tab of Payroll Employee Maintenance.

    To check whether valid termination reasons are selected for terminated employees:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Select 2022 in the Payroll Year field.
    3. Select Yes in the Terminated Employees field.



    4. Click OK.
    5. Click the General tab.
    6. Select an employee using the Payroll Employee Selector.
    7. Select a termination reason using the Reason drop-down list.
    8. Repeat steps 5 and 6 for the remaining employees.  



    Expand
    titleChecking whether employee taxation details have been correctly converted

    Synergetic automatically converts existing taxation details to the STP2 specification during the upgrade, but you must check the following fields for each employee to ensure the conversion was successful:

    • Tax scale
    • Medicare Levy Surcharge
    • Medicare Levy Reduction
    • Tax Treatment Code
    • Employment Basis
    • Super Liability/OTE Submit
    • Income Type.

    To check employee taxation details have been correctly converted:

    1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
    2. Click OK.
    3. Click the Tax tab.
    4. Select an employee using the Payroll Employee Selector.
    5. Check whether:

      - Tax Scale field is populated with a valid (four character) STP2 tax scale code
      - Medicare Levy Surcharge and Medicare Levy Reduction fields are populated
      - Tax Treatment Code populates correctly

        Note: This read-only field is a combination of the values selected for the Tax Scale, Medicare Levy Surcharge and Medicare Levy Reduction.

      - Employment Basis field is populated with the employment of the payroll employee (e.g. Full Time Employee)
      - Super Liability/OTE Submit field is populated, if necessary
      - Income Type is populated with Salary or Wages.



    6. Repeat steps 4 and 5 for the remaining employees.



    Expand
    titleChecking whether employee pay codes are correctly configured

    Review the Pay Codes used and update where new Pay Codes have been created per the STP 2 guidelines


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    payrconfig

    Payroll Configuration

    Payroll configuration has been updated to support new tax scales and rates, 

    You need to check the:

    • Payer tab to ensure the payer details of your organisation are correct
    • BMS ID tab to ensure a BMS ID has been generated for your organisation
    • Tax Rates tab to ensure the new tax rates have been loaded

    Once you have completed these procedures, you can enable STP2 using the General tab.



    Expand
    titleChecking whether tax rates are correct

    To check whether tax rates are correct:

    1. Select Module > Payroll > Payroll Configuration Maintenance from the Main menu.
    2. Click the Tax Rates tab.


    Expand
    titleEnabling STP2



    • Tax Rates
    • Superannuation Minimum ($0 from July)


    • Switching on STP2
      • When you are ready to move from STP1 to STP2 you will enable STP Version 2
      • You will be able to set your payroll to STP2 Test Mode
      • When ready to start submitting STP2 files to the ATO de-select Test Mode

    NB:  It is not recommended to keep switching test mode on and off again but can be used for the purposes as described above    

    Updating pay data


    Processing Pays in STP2

    Changes to processing in current pay maintenance

    • When using a pay code for leave you will need to know



    Processes to add / consider

    • Potentially change leave documentation to include reason for leave