Income statements explained¶

Years ago, at the end of the financial year, employees were handed a paper summary of their pay for the year. It was called a payment summary, and many people still call it a "group certificate". For pay reported through Single Touch Payroll (STP), that paper form has been replaced by the income statement.

The Australian Taxation Office (ATO) explains that the income statement is the new name for the payment summary. Instead of a piece of paper from the employer, employees now find it online.

In one line

The income statement replaced the old payment summary (the "group certificate") — employees see it in myGov, and use it for their tax return once it is "Tax ready".

Why this matters¶

Employees sometimes ask you, their employer, for their "group certificate" at tax time. For pay you reported through STP, there usually isn't one to hand out. Knowing this lets you point them to the right place — their income statement, online — instead of searching for a form that no longer applies.

What you will learn¶

What an income statement is
Where employees find it and what it shows
Why employees wait for "Tax ready" before lodging their return

Understanding the concept¶

For pay reported through STP, the ATO builds each employee an income statement from the pay information you send during the year. The ATO explains that employees access it through ATO online services in myGov (or the ATO app). To see it, the employee needs a myGov account linked to the ATO.

The income statement shows the employee's pay for the year, the tax withheld from it, and their super. Because you report every pay through STP, the ATO can keep this picture up to date without any paper form.

At the end of the year, once you make your STP finalisation, the ATO changes the income statement status to Tax ready. The ATO tells employees to wait for that status before they prepare and lodge their tax return, because amounts can still change until the employer finalises. The ATO notes that if someone lodges before it is "Tax ready", they may have to amend their return later.

Because these amounts are reported and finalised through STP, the ATO says employers generally no longer need to give employees a payment summary for those STP-reported amounts.

For accountants & bookkeepers

The income statement is the STP equivalent of the payment summary. The ATO notes an employee may still receive a payment summary from any employer who has not yet started STP reporting, so a person can have a mix in one year. Amounts shown before finalisation are not final; the ATO advises against relying on figures that are not yet "Tax ready", as they may change when the employer finalises.

Example¶

Sam works for a small business all year and wants to do a tax return in July. Instead of waiting for a paper group certificate in the post, Sam logs in to myGov, goes to ATO online services, and opens the income statement. It shows the year's pay, the tax withheld, and super.

At first the status is not "Tax ready", so Sam waits. A few days later the employer finalises through STP, the status changes to "Tax ready", and Sam gets a myGov notification. Now the figures are safe to use, and Sam completes the tax return.

Common mistakes¶

Waiting for a paper "group certificate" that, for STP-reported pay, no longer comes.
Using the figures before the status says "Tax ready" — they can still change.
Assuming an employer will email the income statement — employees view it themselves in myGov.

How this works in myaccountant¶

In the app — when you run pays, myaccountant reports them to the ATO through STP, which is what feeds each employee's income statement in myGov. At year-end you use the finalisation screen to send your STP finalisation; once that is done, the ATO marks each employee's income statement "Tax ready". Employees can also see each pay's details on the payslips myaccountant produces through the year.

Key points¶

The income statement replaced the old payment summary (the "group certificate").
Employees view it in ATO online services through myGov, not on paper.
It shows the year's pay, tax withheld and super.
After the employer finalises through STP, it is marked "Tax ready".
Employees should wait for "Tax ready" before lodging their tax return.
For STP-reported pay, employers generally no longer hand out payment summaries.

Learn next¶

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

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