Fixing a mistake after finalising the year¶

At the end of the payroll year you finalise your Single Touch Payroll (STP) data. This tells the Australian Taxation Office (ATO) that you have fully reported the year's pay for each employee. Sometimes, after you have finalised, you notice that something was wrong — a figure was off, or a pay was missed.

Take a breath. This is a normal thing that happens, and it is fixable. You do not undo the finalisation. Instead, you make the correction in your payroll and finalise again. The updated information flows through to the ATO and refreshes the employee's income statement.

In one line

Found an error after finalising? Correct it in your payroll and finalise again — the ATO updates the employee's income statement — then tell the employee.

Why this matters¶

The figures you finalise become the employee's income statement — the ATO's version of a payment summary that the employee uses to do their tax return. If the figures are wrong and you leave them, the employee's tax return could be wrong too. Fixing it properly puts the right numbers in front of both the ATO and the employee.

What you will learn¶

That a mistake found after finalising is still fixable
How to correct the error and finalise again so the income statement updates
Why you should tell the employee, and when they may need to amend their tax return

Understanding the concept¶

When you finalise, the ATO marks the employee's income statement as tax ready. That is the signal to the employee that the figures are complete and they can use them for their tax return.

If you later find a mistake, the ATO's guidance is to fix it as soon as you can. You make the correction in your payroll — the same way you would correct any pay — and then finalise again. Sending the corrected, finalised information is what the ATO calls an update. The ATO then makes the updated income statement available to the employee through its online services.

The important extra step is to tell the employee. If they have not yet done their tax return, the corrected figures will simply be there waiting for them. But if they have already lodged their tax return using the earlier figures, the ATO explains they may need to amend that return, because the numbers have changed.

For accountants & bookkeepers

The ATO's STP reporting guidelines say that where an amendment is needed after a finalisation declaration, it should be lodged as soon as possible via an update event, and the client should notify affected payees because they may need to amend a lodged return. Finalised amounts can be corrected for a number of years after the end of the financial year — check the ATO's current guidance for the exact window before acting.

Example¶

Priya runs a small cafe and finalised her STP data for the year in July. In August she realises one employee's allowance was left out of a pay in June, so their yearly totals are a little low. Priya adds the correction in her payroll, then finalises again. The corrected totals flow to the ATO, and the employee's income statement updates to show the right figures. Priya sends the employee a quick message to let them know. Because the employee had already lodged their tax return, they arrange to amend it using the corrected numbers.

Common mistakes¶

Assuming finalising "locks" the year and the error is stuck — it is not; you can correct and finalise again.
Fixing the payroll but forgetting to finalise again, so the income statement never updates at the ATO.
Not telling the employee — if they have already lodged, they may need to amend their tax return, and they cannot do that if they do not know.

How this works in myaccountant¶

In the app — you correct the pay the same way you would fix any pay, then run the end-of-year finalisation again for that employee. myaccountant sends the updated, finalised figures to the ATO, which refreshes the employee's income statement. It is still a good idea to message the employee yourself so they know the numbers changed.

Key points¶

A mistake found after finalising is fixable — you do not undo the finalisation.
Correct the pay in your payroll, then finalise again.
The updated figures flow to the ATO and refresh the employee's income statement.
Do it as soon as you notice, so the correct figures are ready for the employee.
Tell the employee about the change.
If they have already lodged their tax return, they may need to amend it.

Learn next¶

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

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