Payment summaries

What Are Payment Summaries?

Payment summaries, previously known as Group Certificates, are documents that outline the total payments an employer has made to an employee during a financial year. They include information such as gross income, tax withheld, allowances, reportable fringe benefits, and super contributions.

However, since the introduction of Single Touch Payroll (STP) in Australia, most employers no longer need to issue paper payment summaries. Instead, income statements are now made available to employees through myGov or their registered tax agent.

Key Details Contained in a Payment Summary

A traditional payment summary would include:

• Gross income earned by the employee
• PAYG withholding tax deducted
• Allowances (e.g., travel, meals)
• Fringe benefits and reportable employer super contributions
• Lump sum payments like leave payouts, termination payments, or redundancy payouts

For employers not yet under STP (e.g. those with closely held payees or micro employers with exemptions), these details must still be reported using a PAYG Payment Summary – Individual Non-Business (INB) form.

Transition to Income Statements via STP

Since 1 July 2019, employers reporting through STP are not required to provide payment summaries to their employees. Instead:

• The ATO receives payment and tax data directly from the employer each pay run.
• Employees can access this data via their myGov account, under Income Statements.
• This shift helps reduce paperwork, prevent errors, and improve data matching for tax purposes.

If you’re still issuing payment summaries manually, you may want to review your payroll software and consider transitioning to STP-compatible systems for improved compliance.

Are Employers Still Required to Provide Payment Summaries?

Only in specific cases. As of FY20 onward, the majority of employers fall under STP and no longer issue paper payment summaries. However, exceptions include:

• Closely held employees (e.g. family members, directors)
• Micro employers who applied for STP deferral or exemption
• Employers who pay in-kind benefits that must be reported separately

In these situations, payment summaries must be provided to employees by 14 July following the end of the financial year, and the employer must lodge a PAYG Payment Summary Annual Report (PSAR) with the ATO by 14 August.

Employer Obligations Around Payment Summaries

If you are required to provide payment summaries:

• Use the correct ATO forms and formats
• Deliver payment summaries to employees by 14 July
• Lodge a PSAR with the ATO by 14 August
• Keep records of payment summaries issued and tax withheld

For STP-compliant employers:

• Ensure accurate reporting each pay run
• Finalise your STP reporting by 14 July each year (this acts as the employee’s income statement)
• No additional reports or paper summaries are required

How Microkeeper Helps With Payment Reporting

Microkeeper is fully STP Phase 2 compliant, meaning you don’t need to worry about issuing traditional payment summaries. Here's how Microkeeper supports your EOFY obligations:

• Automatic STP submission each pay run
• STP finalisation feature for the end of financial year
• Built-in tools to reconcile year-to-date earnings and tax
• Support for closely held payees and fringe benefit reporting

Explore Microkeeper’s Payroll & STP Features

Frequently Asked Questions

How do employees access their income statement if my employer uses STP?

‍Employees can log into myGov, link their ATO account, and access income statements under "Employment" in the Income section.

What if my income statement says 'not tax ready'?

‍Your employer may not have finalised their STP reporting yet. You should wait until it is marked as Tax Ready before lodging your tax return.

Can I still request a payment summary?

‍If your employer uses STP, they are not required to provide a paper summary. However, you can ask for a payslip history if you need a breakdown.

What happens if there’s a mistake in my payment summary or income statement?

‍Employers can make STP corrections in their software or issue amended payment summaries if not using STP.

Best Practices for Employers

• Transition to STP-compliant software as soon as possible
• Educate employees on accessing income statements via myGov
• Ensure accurate earnings and tax data throughout the year
• Finalise STP data by the 14 July deadline to avoid ATO penalties

Final Thoughts

While payment summaries were once a cornerstone of end-of-year payroll, the introduction of STP has modernised and streamlined the process. Understanding when and how they are still required ensures compliance and clarity for both employers and employees.

Using modern payroll platforms like Microkeeper can eliminate paperwork, reduce errors, and keep you aligned with evolving ATO requirements.

_{Disclaimer: This glossary entry is for general information only and does not constitute financial or tax advice. Please consult the ATO or a registered tax professional for specific guidance on your obligations.}