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Fran_29's avatar
Fran_29
Contributing Cover User
3 years ago

STP2

Hi,

I managed to update to STP Phase 2, but when I sent an update event, I received a message with" Accepted with errors", but it says the good news that it has been accepted  by the ATO.

It says it needs to fix before the next pay run. Cessation Reason code must be provided.

I had a terminated employee -Lump sum A for unused annual leave. 

Could you please help and advise? is it something that  I have missed? I know the code is T, but I don't know where to put the code. Please advise. Hope to hear from you soon. Thank you.

 

Kind Regards

Fran

  • Hi Fran_29 

     

    From here

    1. Go to the Payroll command centre and click Payroll Reporting.
    2. Click Payroll Reporting Centre.
    3. If prompted, sign in using your MYOB account details (email address and password).
    4. Click the Employee terminations tab.
    5. Choose the applicable Payroll year and click Add Termination.
    6. Enter the termination details and click Notify the ATO.

    Regards

    Gavin

11 Replies

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  • Hi Fran_29 

     

    See this Article about transitioning to Phase 2 under 'Before you begin' - there is a reference to Terminated Employees in the current payroll year. Basically you need to 'undo' the termination and then redo it, this then allows you to add code.

     

    FYI Lumps Sum A - you mention Type T - you may want to check the details with your accountant or tax adviser. Unless an employee is made redundant, only unused annual leave that relates to pre 1993 service is reported as Lump Sum A. Unused annual leave since 18 Aug 1993 is simply included in Gross Income.

     

    Regards

    Gavin

    • Fran_29's avatar
      Fran_29
      Contributing Cover User

      Hi gavin 12345,

      Thanks for your reply.

      The terminated employee is after 1993. It should be included Gross Income.

      I have entered the unused annual leave as Lump sum A. 

      Is there a way that I can change the pay from Lump sum A to Annual Leave and include as Gross Income.

      Do I reverse the pay? Thank you

       

      Kind Regards

      Fran

      • gavin12345's avatar
        gavin12345
        Ultimate User

        Hi Fran_29 

         

        Yes I think you will need to reverse the pay and re-enter it.  There are other ways but this is the safest.

         

        I should clarify my comments re Lump Sum A etc. If the accrued leave relates to a period after Aug 1993, the amount is not Lump Sum A unless the termination is caused by things like genuine redundancy. This means that any payout on termination for accrued annual or LSL is simply included as part of the employee's income. There is no special tax treatment for this amount and it is taxed at the employee's marginal rates. So under Phase 1, most employers would use a payroll category such as Unused Holiday Pay in MYOB and assign this to Gross Payments for STP Reporting purposes. 

         

        However, while not covered in the linked MYOB Article, Phase 2 requires a whole lot more detailed reporting when it comes to Leave. Any leave or leave related payments must be reported as a Leave Type and not included in the Gross Payments. This particularly affects terminated employees.

         

        This is where things will get tricky for employers as you may need to create more specific payroll categories to accommodate the new reporting requirements. For example Unused Holiday Pay that is not Lump Sum A, needs to be assigned to 'Unused Leave on Termination'. However for genuine redundancy employees, Unused Holiday Pay needs to be assigned to Lump Sum A.

         

        So some employers will need to create and use additional payroll categories, for example Unused Holiday Pay Regular and Unused Holiday Pay Redundancy. This will allow you to assign these to different reporting categories.

         

        Regards

        Gavin