MULI PROCEDURE 3160 STP2 UPGRADE
STP2 – Single Touch Payroll Phase 2
Background:
It is recommended that if you have not already that you should make yourself familiar with Single Touch Payroll Phase 2 employer reporting guidelines.
STP2 is a major change to the way payroll is set up for processing.
There are major changes are in the breakup of Gross Payments to Employees by
Income Stream and further within Income Stream by Tax Treatment and types of Payment. As such Muli have had to issue new ‘Pay Sequence Codes’ to comply.
Previously all incomes where reported under the one ‘Income Stream’.
Now there are multiple income streams of which these are some of the supported ones:
SAW - Salary and wages
CHP - Closely held payees.
Family members of a family business
Directors or Shareholders of a company
Beneficiaries of a Trust
WHM – Working holiday makers.
SWP – Seasonal workers program.
VOL – Voluntary agreement.
Income Streams and Tax Treatment is set up in Employee Taxation Maintenance.
Types of Payment are reported by the Muli STP2 Code on the pay sequences.
Because of these new STP2 requirements it is required that you change your employees to New pay classifications and allowance codes, as existing pay classifications and pay sequences will not comply!
Before commencing to implement STP2, you will need to have been migrated to the New Muli Version 15.
See Procedure 1910 – V15 User Setup.
New Payroll requirements CHP:
All Directors, Shareholders and Family Trust members paid by Muli payroll are to be reported as are part of Payroll as CHP Income Stream and all payments to them must be processed in payroll. (unless all payments to them are processed external to Muli! e.g. via your Accountant)
For reconciliation purposes, all payments are paid and reconciled on payrun accounting date within financial year.
No facility has been made to allow estimates of CHP income. You have to process values at lease four (4) times a year, pay tax and superannuation, even if sits in control account.
Muli does not allow for adjustments to CHP employees past year end final Return (prior to first pay period of new year). Should this occur, then your accountant will need to advise the ATO.
Superannuation under Muli STP2 will require you to move to SuperStream Reporting and free CBUS upload and distribution of monies.
STP2 cannot be activated without Superstream being implemented first!
* Recommendation to all staff
Use [5.3] Reimbursement Processing. Muli recommends you use this for all legitimate expenses keeping them away from Payroll Audit.
STP2 IMPLEMENTATION STEPS:
Preparation for Upgrade:
Step 1.
Verify you have implemented SuperStream. Muli Procedure 5621.
Step 2.
Before turning on STP2 you need to review and update all Pay Sequence Codes in use this year for the muli_STP2_code to ensure smooth transition.
Run [9.10.7] Pay Sequence Report – ensuring you say Yes to:
- 3. Show both User and Master Data
- 5. Include ONLY ones used this financial year?
The new master codes issued by Muli will be shown in black.
The existing user codes will be in blue.
What are you looking for.
The column headed STP2 Code representing STP Phase 2 Reporting. All user created pay sequences used this year will require an STP2 Code. On your user pay sequences look for blank or incorrect Muli STP2 codes, especially on Paid Leave. Use the Muli Issued pay sequence STP2 Coding to help determine the correctly required Muli STP2 code for you suer pay sequence.
Where a user entered pay sequence, replaces a new Muli issued pay sequence (that will now be required in STP2 to pay employees correctly for STP2 reporting), consult with Muli as to setting up a new user replacement pay sequence and correctly adding to required pay class coding. All pay sequences with an ‘M’ STP2 Code are not reported in STP2. Code ‘9999’ cannot be used.
STP Usage, the Column before the STP2 Code column.
A - indicates it can only be used for STP1 reporting and cannot be used for STP2 timesheets.
B – indicates it may be used for both STP1 & STP2 timesheets.
C – indicates STP2 timesheets only!
It is essential that you verify all of the muli STP2 codes to be correct before you go further.
With the introduction of the “Building & Construction General Onsite Award 2020”, there has been a reduction in the number of Site Allowances and with STP2 Reporting a requirement for the separation of normal and overtime payment, requiring nine (9) separate pay Codes for each employment pay classification under these awards groupings. The new groupings are code 508 values ‘C390’ through to ‘C970’.
While the Award covers limited pay classification, your local MBA highlights the differing pay rates for differing Roles with Award pay bands. So for individuals, you may need to adjust pay rates, ie: once an apprentice is set up with Pay Code C390 , you just need to change an individual’s pay rate each year as they progress.
Check the base rates for all your proposed categories.
STEP 3
Run [9.10.7] Pay Sequence Report to get an updated copy.
Run [9.10.9] Employment Class/Pay Sequence Report. Review your Pay Class Codes and modify accordingly for STP2 reporting noting you should set up or use the new STP2 classifications not modify existing STP1, prior to Muli turning on STP2.
Run [9.8.9] Employee Report (Excluding Terminated Employees Q17 - No)
STEP 4
[9.11.2] YTD Pay STP Validation Report
Obtain a list of all employees this year, all RPC’s, NO to detail.
Forward this to support@muli.com.au so they can use this to do the required STP2 updates when appropriate.
STEP 5
You need to verify each individual’s tax status under STP2
[9.8.2] STP Stage 2 Tax Maintenance
All those people who are owners or directors or are related to them need to have their income stream set as CHP (Closely Held Payees).
You need to set Question 8 to CHP – create income stream
Question 19 – Set active income stream to 1
Note: There are other options for Working Holiday Makers, Foreign Employment, Labour Hire, Seasonal Workers and Voluntary for special tax rates.
STEP 6
19.7.7 Bulk Onboarding Certificate Run
Create an Onboarding Certificate and have each individual verify the details, sign and return the hard copy.(This should be done with all new employees or any time an individual’s Tax Details Change.
Then update any adjustments and adjust 21 to the date the updated Certificate was signed.
Keep Certificates (in case of Tax Office audit) in RPC file.
STEP 7.
Ensure to adjust work classification or directly add appropriate STP2 codes to allow a complying STP2 payroll to be processed.
[9.10.2] Accounts Interface Maintenance
Need to review in line with new control accounts.
STP2 IMPLEMENTATION STEPS:
Completion of preparation:
Once the preparation is completed and all existing payruns and their STPs have been processed and no new payruns have been set up, you are ready for Muli to turn on STP2 and do the update events for the terminated employees.
The turning on of STP2 will send a series of reports to Muli to help evaluate if you are ready to set up your first payrun and flag all STP phase 1 pay sequences as inactive.
Muli will then contact you and you will be able to:
change the employee employment classifications for STP2.
Set up your first payrun for STP2.
Visit your time sheets and ensure you have no issues with their pay sequences.
Please liaise with Muli after validation of your payrun and before processing.
NOTE:
What we need to be looking for in the way of Muli STP2 Codes.
That all payments (which are not classified as ordinary time earnings) are paid and classified correctly. e.g. Paid Leave, Allowances, Termination payments.
That all deductions such as Child Support and Child support Garnishees are done and classified correctly.
