Using more than one payroll system¶

Most businesses run payroll in a single system, but some run two — perhaps different parts of the business use different software, or you switched systems part-way through a quarter. When that happens, the pre-filled W1 and W2 on your Activity Statement need an extra check, because the pre-fill may only reflect some of your payroll reports.

This is a classic "the pre-fill doesn't match" situation. The fix is to make sure the figures you lodge cover all your wages and withholding — and that you have not counted anything twice.

In one line

If you use more than one payroll system, make sure the W1 and W2 you lodge cover all your wages and withholding across every system, without double-counting.

Why this matters¶

If your pre-fill only picks up one system, lodging it as-is would leave out the wages and tax from the other — you would under-report. And if a pay happened to be reported from two systems, adding both would over-report. Either way, the lodged figure would be wrong. Getting this right is simply about making the totals add up to your true payroll.

What you will learn¶

Why the pre-fill may reflect only some of your payroll systems
How to make sure W1 and W2 cover all your wages and withholding
How to avoid double-counting amounts reported in more than one system

Understanding the concept¶

The ATO builds your pre-fill from the STP reports it has received and processed. Each payroll system reports separately and is identified to the ATO by its own software identifier. So if you run two systems, the ATO receives two streams of reports.

The catch is that the pre-fill you see may not neatly add both streams together for the period you are looking at. It may reflect one system and not the other, or reflect them unevenly — for example, if you switched software mid-quarter and only the newer system's reports have been processed into the pre-fill so far.

There are two things to get right:

Cover everything. Add up the wages and withholding from every system that ran payroll in the period, and make sure the W1 and W2 you lodge include all of it.
Do not double-count. If the same pay was reported from more than one system — which can happen around a switch — count it once, not twice.

The safest habit is to work out your true totals from your own payroll records across all systems, then compare that to the pre-fill and adjust the labels so the lodged figures match your real, combined payroll.

For accountants & bookkeepers

The ATO's rules of reporting through STP note that each payroll solution is identified by its own software identifier, so an employer using more than one solution reports separately from each. The activity statement pre-fill is built from processed reports, and the ATO states your software and payroll records are your primary source of data and that you should correct W1 and W2 to match your records, reporting total amounts. Where a business runs parallel systems or migrates mid-period, reconcile the combined employer-level totals across all systems before lodging, watching for both gaps and duplicate reporting of the same pay.

Example¶

Sam owns two shops and, for a while, ran each shop's payroll in its own software. Half-way through the quarter Sam moved both shops onto one system. At BAS time, the pre-filled W1 and W2 look low.

Sam checks the combined payroll records and finds the reason: the pre-fill has picked up the new system's reports but not all of the old system's, so a chunk of wages and withholding from early in the quarter is missing. Sam also spots a risk — one pay near the switch-over was entered in both systems for a moment, so it could easily be counted twice.

Sam works out the true totals from the records of both systems, includes the missing early wages and tax, and makes sure the doubled-up pay is counted only once. Sam then adjusts W1 and W2 to those combined totals and lodges. The figures now cover every wage and every dollar withheld across both systems — no gaps, no duplicates.

Common mistakes¶

Lodging the pre-fill when it only reflects one of your payroll systems — leaving wages and tax out.
Double-counting a pay that was reported from two systems around a switch-over.
Forgetting the old system entirely after moving to a new one mid-quarter.
Not reconciling your combined totals from your own records before adjusting the labels.

How this works in myaccountant¶

In the app — when you prepare your Activity Statement, myaccountant shows the pre-filled W1 and W2 next to the wages and withholding from your payroll for the period, so you can see whether the pre-fill covers everything. If you run payroll elsewhere as well, you can adjust the figures before you lodge so they reflect your full, combined payroll across every system.

Key points¶

Each payroll system reports to the ATO separately.
The pre-fill may reflect only some of your systems — especially after a mid-quarter switch.
Make sure the W1 and W2 you lodge cover all your wages and withholding.
Count each pay once — never double-count amounts reported from two systems.
Work out your true totals from your own records across every system.
Adjust the labels so the lodged figures match your real, combined payroll.

Learn next¶

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

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