What is payroll reporting?¶

Every time you pay your staff, payroll creates more than just money in a bank account. It also creates information — records of who was paid, how much, how much tax was taken out, and how much super they have earned. Payroll reporting is the job of turning that information into the reports different people need.

There are three audiences for that information. The first is the Australian Taxation Office (ATO), which is the government body that collects tax. The second is your employees, who need to see their own pay details. The third is your own business, which needs to keep track of what staff cost you.

Why this matters¶

Getting people paid is only half the job. The other half is reporting it correctly. If the ATO does not get the right information, your business can fall out of step with its obligations. If employees do not get clear pay details, they cannot check their own pay or do their tax return. And if you never look at your own payroll reports, you can lose track of one of your biggest costs. Knowing the three audiences helps you see what each report is for.

What you will learn¶

• The three audiences that payroll reporting serves
• What each audience needs, at a high level
• Why keeping these reports accurate matters for your business

Understanding the concept¶

Think of every pay run as producing one set of facts — the pay details for that period — that then flows out to three different places.

1. To the ATO. Each time you run payroll, information about wages, the tax you have withheld, and super is sent to the ATO. This is done through a system called Single Touch Payroll (STP). The ATO explains that STP sends tax and super information from your payroll software each time you pay your staff. You also pay your employees' super to their super funds. A later lesson covers this in more detail.

2. To your employees. Every employee must get a payslip for each pay. Fair Work, the national workplace regulator, sets out what a payslip must show and when it must be given. Once a year, each employee also gets an income statement — a summary of their pay and tax for the year — which they use to do their tax return.

3. To your own business. Payroll also produces internal reports just for you. These help you see what your staff cost, plan your cash, and check your figures. No one outside the business has to see these, but they are some of the most useful reports you have.

The rest of this module walks through each of these three audiences one at a time.

Example¶

Priya runs a small cafe with four staff. On pay day, she runs her weekly pay run. That one action sets off three streams of reporting. The wage and tax information for that pay is sent to the ATO through STP. Each of her four staff gets a payslip showing their hours, gross pay, tax and super. And Priya can open a payroll report that adds up what her four staff cost her that week, which helps her plan her cash for the month. One pay run, three audiences.

Common mistakes¶

• Thinking payroll reporting is only about the ATO — employees and your own business need reports too.
• Assuming a payslip and an income statement are the same thing. A payslip is for each pay; an income statement is a yearly summary.
• Ignoring your own internal reports — they are often the most useful for running the business.

How this works in myaccountant¶

Key points¶

• Payroll reporting turns each pay run into information for three audiences.
• The ATO receives wage, tax and super information through Single Touch Payroll.
• Employees receive a payslip each pay and an income statement once a year.
• Your own business gets internal payroll reports to manage cash and staff costs.
• One pay run produces all three — you do not report three separate times.
• Accurate reporting keeps you in step with the ATO and keeps staff informed.

Learn next¶

• What you report to the ATO
• What your employees receive
• Payroll reports for your business

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