Producing PAYG payment summaries

Australia only 

If you pay employees, you need to produce PAYG payment summaries at the end of each financial year. These need to be given to your employees, and lodged with the ATO.

Use the PAYG Summary Centre to create payment summaries that you can print for your employees and lodge electronically with the ATO through their online portal.

Note that the PAYG Summary Centre can only be used to produce payment summaries from 2012-13 and later. If you need to produce payment summaries for the 2011-12 financial year or earlier, see Previous year PAYG payment summaries (2011-12 and earlier).

Creating the payment summaries

To access the PAYG Summary Centre, go to the Payroll menu and choose PAYG payment summaries.

To create payment summaries, choose the financial year and employees you want to create payment summaries for, and then click Enter payment summary info.

There are two parts to producing the payment summaries:

• Enter the payment summary information—Enter employees’ details and information about the payments you’ve made to them during the financial year. See Enter payment summary info.
• Review the payment summaries and print copies for your employees—Check the payment summaries you’ve created for each of your employees. You can also print a PDF to give to your employees.
• Create and lodge the payment summaries—Enter lodgement details and create an electronic copy of your payment summaries that you can lodge online through the ATO’s portal. See Creating and lodging the payment summaries.

Enter payment summary info

In this step, you will enter all the employee details and details about the payments you’ve made the employee over the past financial year.

You should complete all of the following steps for each employee you’ve selected to create payment summaries for.

When you’re done, continue to the next step, where you can

Step 1 – Employee details  x

Enter the employee’s personal and tax details. You must enter the employee’s tax file number and their address.

If you’ve already entered an address on their employee record, you may need to reformat it to meet the ATO’s requirements. The address on the employee’s card is shown under the Current address on file heading for you to refer to.

When you’re done, click Next.

Step 2 - PAYG Summary details  x

Choose the type of payment summary and the dates it covers.

New or amended payment summary

Note that you should only create an amendment if you need to make changes to a payment summary you’ve already lodged with the ATO. If you’re making changes to a payment summary that you haven’t lodged, select the No, this is a new PAYG summary option.

Period worked by employee

If the employee worked for you for the entire financial year, select Yes. If they only worked for you for part of the year, select No and choose the dates they were employed.

When you’re done, click Next.

Step 3 - Assign allowances and deductions  x

Classify each of the allowances and deductions paid to the employee during the financial year into one of the following categories. This ensures they are included in the correct section of the PAYG payment summary.

Allowances

You can classify allowances into one of three categories, depending on the reason for the payment or the type of allowance.

• Allowance—Amounts paid to employees on top of their pay, to cover their work-related expenses. This includes travel, uniform and tools allowances, as well as motor-vehicle allowances and car expense payments paid per-kilometre.
• Gross—Amounts that are included in the employee’s gross pay, before tax. This includes salary, wages, bonuses and commissions, sick pay, and allowances paid for working conditions, special qualifications or extended hours, or to cover expenses that aren’t tax deductible, such as transport between work and home.
  If you’ve used an allowance to pay any of these amounts, you should assign it to Gross. For example, you might have set up an allowance in MYOB Essentials to pay commissions. Because commissions aren’t treated as allowances for tax purposes, but need to be included in the employee’s gross pay, you should assign this allowance to Gross.
• Exclude—Amounts that don’t need to be included in the PAYG payment summary. This may include some fringe-benefit allowances, such as living-away-from-home allowance.

Deductions

You can classify deductions into one of four categories, depending on the type of deduction.

• Employer super—Reportable superannuation contributions, such as salary sacrifice amounts, additional payments to superannuation or additional contributions above the compulsory level. Note that this doesn’t include ordinary employee or employer superannuation contributions.
• Union fee—Amounts deducted from the employee’s pay for union, association or professional fees.
• Workplace giving—Tax-deductible donations, authorised by the employee, to recognised charities or organisations that are entitled to receive tax-deductible donations.
• Exclude—Amounts that are exempt from inclusion in the PAYG payment summary. This includes some voluntary deductions requested by the employee, such as social club membership or cafeteria plans.

For more information about how to classify individual allowances and deductions, see the ATO website.

When you’re finished assigning allowances and deductions, click Next.

Step 4 - Check assignments are correct  x

This step lists all of the allowances and deductions included in each category. Check that these are correctly assigned.

If an allowance or deduction appears under the wrong category, you can change it by returning to step 3 and assigning it to a different category.

Note that any allowances and deductions assigned to the Exclude category won’t appear here. Only categories that will be included on the payment summary are shown.

When you’re done, click Next.

Step 5 - Enter other income items  x

If you have paid the employee any additional income not tracked by MYOB Essentials, include it on their payment summary by entering it in this step. For more information on these categories, see the ATO website.

Note that these amounts must be entered in whole dollars.

• Community development employment projects (CDEP)—The total amount you have paid the employee from a CDEP wages grant.
• Deductible amount of the un-deducted purchase price of the annuity—Ithe deductible portion of the amount the employee contributed towards the purchase price of any non-superannuation annuities or pensions you pay them. The deductible amount is the part of their annual pension or annuity income that represents a return to them of their personal contributions that is free from tax. Only enter the deductible amount in this section.
• Lump sum A—Redundancy or termination payments made to the employee during the financial year.
• Lump sum B—Payments made to the employee in exchange for long service leave accrued before 16 August 1978.
• Lump sum D—The tax-free component of a redundancy payment or early retirement scheme payment.
• Lump sum E (back payments)—Amounts paid for back payment of salary and wages accrued more than 12 months ago, as well as any return to work payments.
• Exempt foreign employment income—Income earned overseas that is exempt from tax. For more information, see the ATO website.

When you’re done, click Done! Next employee.

When you’ve finished the final employee, enter the authorised signatory for the summaries, and click Continue to review. The Review payment summaries page appears, showing a summary of the amounts included on each employee’s PAYG payment summary. See Review payment summaries.

Review payment summaries

When you’ve finished the final employee, enter the authorised signatory for the summaries, and click Continue to review. The Review payment summaries page appears, showing a summary of the amounts included on each employee’s PAYG payment summary.

You can print a copy of each employee’s payment summary by clicking the PDF icon in the right hand column.

When you’re done, click Continue to create file for online lodgement. See for more information on this step.

Emailing payment summaries

On the Email payment summaries page, you can email each employee with their payment summary. The payment summary will be sent as a PDF attachment to the email, and your employees can open it using a PDF viewer such as Adobe Acrobat.

Select which employees you want to email payment summaries to. If you’ve entered an email address on their employee record, it will appear in the Email address column. Otherwise, you can type their email address in the field next to their name.

If you want, you can also edit the content of the email you’ll be sending by changing the text in the Email body text field. Note that th text in square brackets will be automatically replaced by the employee’s name and your own name in the email you send, and may not work correctly if you change it.

If you want to email the payment summaries to another email address in addition to the employee’s (for example, your own email), select the Bcc option and enter the email address you want to send them to. Note that the employee won’t be able to see that you’ve emailed their payment summary to this email address, so make sure you keep their privacy in mind.

When you’re done, click Email and continue to email payment summaries to the selected employees, or if you haven’t selected any employees to email, click Continue to create file for online lodgement.

Creating and lodging the payment summaries

On this page, you create an electronic file that you can submit to the ATO through their online portal.

Enter lodgement details  x

1. Choose whether you lodge your own PAYG payment summaries report with the ATO or whether you use a third party (for example, your accountant or bookkeeper) to lodge PAYG payment summaries for you.
2. Enter your business details, including your business’s address, your ABN or WPN and the contact details of the person at your company lodging the PAYG payment summaries.
   If you are using a third party to lodge the payment summaries, enter this information for them, as well.

Create and lodge the EMPDUPE file  x

1. Click Create EMPDUPE file. This creates an electronic file that you can save to your computer’s hard drive.
   When you click this button, you might be prompted to save or open the file. Choose Save (or Save As) and take note of where you save the file.
   If you aren’t prompted for where to save the file, it may have already been saved to your Downloads folder, or to your default download location.
2. You can send this file to the ATO using one of two methods:
   • Online lodgement—You can lodge this file directly with the ATO online through their online portal. For more information on this process, see the ATO website.
   • Electronic media through the post—You can save this file onto electronic storage media (such as a CD-ROM, USB flash drive, etc) and mail it to the ATO. If you choose this method, the storage media containing your EMPDUPE file needs to be accompanied by the Electronic storage media information form. Print the form by clicking Go to the ATO page to print the electronic storage media form. For more information on this process, see the ATO website.