Correcting STP-related amounts on a statement¶

When you pay staff, you report the wages and the tax you held back to the ATO through Single Touch Payroll (STP). Those same figures feed the wages and tax-withheld labels on your Activity Statement. So if a pay was reported wrong, there are two things to think about — fixing the payroll report, and fixing any statement you already lodged with the wrong number on it.

In one line

Fix the underlying Single Touch Payroll report to put the right year-to-date figures with the ATO. If you already lodged a statement with the wrong amount, revise that statement too.

Why this matters¶

The wages you report through STP and the tax you withhold from them appear on your statement as W1 (total wages) and W2 (tax withheld). If the payroll figure was wrong, the statement can be wrong as well. Getting both right keeps your records tidy and makes sure your employees' end-of-year income statements are correct.

What you will learn¶

How fixing a Single Touch Payroll report corrects the figures held by the ATO
How a corrected pay flows through to the W1 and W2 amounts on a statement
When you also need to revise a statement you have already lodged

Understanding the concept¶

STP works on year-to-date figures. Every time you finalise a pay, your payroll software reports each employee's running totals for the year — total wages, total tax withheld, and so on — to the ATO.

Because it is year-to-date, fixing a mistake is usually simple. The ATO explains that if the figures you last reported no longer match your payroll records, you send an updated report with the corrected year-to-date totals. The corrected totals replace the earlier ones, so the ATO ends up with the right numbers. You do this either within 14 days of spotting the need for a correction, or in the employee's next regular pay in the same financial year.

The second part is your Activity Statement. If you have not yet lodged the statement for that period, the corrected wages and tax simply flow into the W1 and W2 amounts when you prepare it — nothing extra to do. But if you have already lodged a statement with the wrong wages or tax withheld on it, correcting the payroll report does not change that lodged statement. You revise the statement separately to line the W1 and W2 amounts up with the corrected figures.

For accountants & bookkeepers

The ATO notes that an employee-level update event corrects year-to-date amounts but does not carry employer-level W1 and W2 period totals, so it will not change the activity-statement pre-fill on its own. Where you report a correction to your employer-level gross-payment and withholding totals, the ATO requires you to include that correction in your activity-statement reporting (for small and medium withholders). If a statement carrying the wrong W1 or W2 has already been lodged, that statement is revised.

Example¶

Priya runs a small cafe with three staff. In May she keys one employee's hours wrong, overstating that week's gross pay by $400 and the tax withheld by about $90. The pay is finalised and reported through STP with the inflated figures.

She spots it a week later. In her next pay run she corrects the employee's year-to-date totals, and the updated figures are reported through STP. The ATO now holds the right running totals for that employee.

Because Priya lodges her BAS quarterly and has not yet lodged the June quarter, the corrected wages and tax simply flow into W1 and W2 when she prepares that BAS. She has nothing extra to fix.

Now compare Jordan, who lodges monthly and had already lodged the May statement with the overstated W1 and W2. Fixing the payroll report puts the right year-to-date figures with the ATO, but the May statement Jordan lodged still shows the wrong amounts. So Jordan also revises that May statement to bring W1 and W2 back in line.

Common mistakes¶

Assuming that fixing the payroll report also fixes a statement you already lodged — it does not; you revise the lodged statement separately.
Re-typing wages or tax straight onto a statement without correcting the payroll report, so your records and the ATO's no longer match.
Leaving a spotted error to build up instead of correcting it promptly.
Forgetting that STP figures are year-to-date, so a corrected total replaces the earlier one rather than adding to it.

How this works in myaccountant¶

In the app — when you correct and finalise a pay run, myaccountant reports the updated year-to-date figures through Single Touch Payroll, so the ATO holds the right totals. Those corrected wages and tax then flow into the W1 and W2 amounts on your next Activity Statement. If a statement carrying the wrong amount was already lodged, myaccountant lets you revise that statement so the figures line up.

Key points¶

STP reports year-to-date figures, so a corrected total replaces the earlier one.
Fixing the payroll report puts the right wages and tax with the ATO.
Wages report at W1 and tax withheld at W2 on your statement.
If the statement is not yet lodged, the corrected pay flows straight into W1 and W2.
If you already lodged a statement with the wrong amount, you revise that statement.
Correct a spotted error promptly rather than letting it sit.

Learn next¶

General information only — not tax, super or financial advice.

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