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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.

In this section we will update pay codes to ensure each pay code has a valid income stream type and reporting category.



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titleConfiguring allowance pay codes

To configure allowance pay codes:

  1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
  2. Search for pay codes used for either:

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

  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 one of the following options from the Reporting category drop-down list:

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

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


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titleConfiguring paid leave pay codes

To configure paid leave pay codes:

  1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
  2. Search for all pay codes used for paid leave 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 Paid Leave using the Reporting Category drop-down list.
  6. 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.

  7. Click OK.
  8. Repeat steps 3 to 7 for the remaining paid leave pay codes.


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titleConfiguring overtime pay codes

To configure overtime pay codes:

  1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
  2. Search for pay codes used for overtime 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 Overtime using the Reporting Category drop-down list.
  6. Click OK.
  7. Repeat steps 2 to 6 for the remaining overtime pay codes.


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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.


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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 Individual - Gross Directors' Fees using the Reporting Category drop-down list.
  6. Click OK.
  7. Repeat steps 2 to 6 for the remaining directors' fees pay codes.


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titleConfiguring return to work pay codes

To configure return to work pay codes:

  1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
  2. Search for pay codes used for return to work payments 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 Return to Work using the Reporting Category drop-down list.
  6. Click OK.
  7. Repeat steps 2 to 6 for the remaining return to work pay codes.


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titleConfiguring salary sacrifice pay codes

To configure salary sacrifice pay codes:

  1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
  2. Search for pay codes used for either:

    - superannuation salary sacrifice
    - other salary sacrifice arrangements (e.g. gym membership).

  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 an option from the Reporting Category drop-down list. You can select either:

    - 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).

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


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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.

    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. 

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-tax deduction pay codes:

  1. Select Module > Payroll > Payroll Employee Maintenance from the Main menu.
  2. Select Deduction - After-Tax (non-superannuation) 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. 


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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:

In this section we will configure the luPayrollTerminationReason lookup table to ensure Australian Government cessation codes are correctly mapped to Synergetic lookup table records.

Additionally, we will review the luPayrollTaxationRate lookup table to familiarise

yourself

ourselves with the new tax scales and understand how they relate to the previous tax scales. 



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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.



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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 In this section we will configure 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.



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titleChecking whether Configuring 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.  



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titleChecking whether Configuring 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.
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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
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.



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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.


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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