Group Certificates In Australia: How To Stay Compliant

If you’ve been in business a while, you probably remember “group certificates” (also called payment summaries). They were the year-end pieces of paper you handed to employees so they could lodge their tax returns.

That process has now been replaced. Single Touch Payroll (STP) moves the old year-end certificate into an ongoing, digital process. You report payroll information to the ATO each pay run, and at year end you “finalise” that data so your employees see an “income statement” marked tax ready in myGov.

The goal is the same - accurate earnings and tax withheld for the year - but the timing and steps are different. In this guide, we’ll explain what “group certificates” mean today, what you’re required to do under STP, common pitfalls to avoid, and practical steps to stay compliant as an employer in Australia.

Quick note: this article focuses on legal and compliance concepts at a high level. For tax or payroll processing advice specific to your circumstances, it’s best to speak with your tax adviser or the ATO directly.

What Do “Group Certificates” Mean Today?

“Group certificate” and “payment summary” are legacy terms. With STP, employers report payroll information to the ATO each pay cycle through STP-enabled software. Under STP Phase 2, this includes disaggregated earnings, PAYG withholding and details needed to classify payments correctly for tax.

At year end, you don’t issue a paper or PDF certificate. Instead, you make a finalisation declaration in your payroll software (or through a registered agent or Online services for business). Once you finalise, the ATO marks each employee’s income statement as “tax ready” in myGov.

Employees - including ex‑employees - can then access that tax-ready income statement when they lodge their return. There’s no separate “group certificate” to prepare or send them.

If you’d like a refresher on the change from payment summaries to STP, our plain-English overview of group certificates breaks down the terminology and history.

Do You Still Need To Issue Group Certificates?

In almost all cases, no. If you report through STP (which most employers are required to do), you should not issue payment summaries to your employees at year end.

Your obligations shift to:

• Reporting payroll information through STP on or before payday, using STP-enabled software.
• Paying PAYG withholding to the ATO in line with your remittance cycle.
• Finalising your STP data shortly after 30 June so your employees’ income statements are marked tax ready in myGov.

Different employer types can have different finalisation dates. As a general rule, many employers finalise by mid‑July so employees can lodge on time, but check the ATO’s dates that apply to you or confirm with your tax agent.

One important nuance: STP reports super information as part of your obligations, but it’s not a confirmation that you have paid the super contributions to funds. You still need to pay super via SuperStream by the quarterly due dates, calculated on the employee’s ordinary time earnings (OTE). If you’re unsure what counts toward OTE, this guide to ordinary time earnings is a helpful starting point.

Your STP Obligations Each Pay Cycle

Compliance is now built into your regular payroll process. To keep things simple and accurate, focus on getting your data right at the source each pay run.

Core Requirements

• Use STP‑enabled software and lodge your pay event on or before payday.
• Calculate PAYG withholding correctly for each employee and remit it by your due date.
• Calculate superannuation on OTE and pay contributions by the quarterly deadlines via SuperStream.
• Keep clear records of hours, allowances, loadings, bonuses, overtime, leave and termination payments so classifications stay accurate in your STP data.
• Fix mistakes promptly. If you spot an error, lodge an update event and adjust your payroll records rather than waiting for year end.

Practical Tips

• Use the correct STP Phase 2 categories for allowances, paid leave and termination payments so the ATO sees the right disaggregated amounts.
• Reduce manual workarounds. Avoid spreadsheet adjustments and instead configure your payroll categories properly so the right amounts flow to STP automatically.
• Set internal cut‑offs for timesheets and approvals that give you time to lodge STP “on or before” payday - especially around public holidays and office closures.

End‑Of‑Year Checklist For Employers

STP runs all year, but you still have a few important tasks at year end to make sure those income statements are accurate and tax ready.

1) Reconcile Payroll Totals

Reconcile gross earnings, PAYG withholding and super across your payroll system, bank transactions and accounting records. Confirm that what you’ve actually paid aligns with what you’ve reported through STP to date.

2) Confirm Employee Details

Check names, TFNs, dates of birth and employment status (current vs former). Mismatched identifiers cause rejected or misallocated STP data, which delays tax‑ready status for employees.

3) Review Allowances, Loadings And Bonuses

Make sure allowances are correctly tagged (for example, travel or tools), and that leave loading and bonuses are classified properly for both tax and super purposes. If you paid bonuses this year, double‑check whether super applies - our overview of superannuation on bonuses steps through the key considerations.

4) Check Terminations And Final Pays

Verify termination payment types, unused leave payouts and cessation dates for former employees. It’s critical to code these correctly under STP Phase 2 and align them with your contracts and policies. For a quick refresher on entitlements and timing, see this guide to calculating final pay.

5) Make Your STP Finalisation Declaration

Finalise through your STP‑enabled software (or via your registered agent). Aim to do this by the ATO’s due date so employees can lodge their tax returns without delay. If you manage closely held payees or have more complex scenarios, check your specific finalisation timeframe.

6) Keep Evidence And Correct Errors Quickly

Retain reconciliation workpapers and payroll reports. If you find a mistake after finalisation, correct it with an update event and re‑finalise so the employee’s income statement updates to tax ready again.

Common Mistakes To Watch (And How To Fix Them)

Most payroll issues come down to classification and process design. Here are frequent pitfalls - and how to avoid them.

Misclassifying OTE For Super

Super is generally calculated on ordinary time earnings, which can be a subset of gross pay. Misclassifying allowances, loadings or overtime can lead to super underpayments. Audit your payroll categories and check your OTE base against awards and contracts, referring to ordinary time earnings guidance when needed.

Incorrect Treatment Of Bonuses Or Leave Loading

Not all bonuses or leave loading are treated the same for tax or super. Document how and why you pay them, and set up tailored payroll items so the correct amounts flow to STP. When in doubt, clarify before you pay - it’s far easier than cleaning up after year end.

STP Lodged Late Or Skipped

Missing the “on or before payday” rule or skipping a pay event can trigger compliance notices and create year‑end headaches. Build your payroll calendar around lodgement timing and assign back‑up authorisers for when key people are away.

Unauthorised Deductions

Deductions for things like uniforms, till shortages or damage must be lawful and properly documented. Unauthorised deductions can breach workplace laws and complicate your PAYG calculations. If a deduction is necessary, make sure it’s permitted and documented - this guide to withholding pay explains the boundaries.

Termination Coding Errors

Incorrectly classifying a termination payment, missing notice or redundancy entitlements, or failing to set the correct STP cessation date can cause tax and reporting issues. Align your process with contracts and keep records for any employer separation certificates requested by government services.

Mixing Up What STP Shows vs What’s Paid

STP shows reported amounts (including super liabilities), not whether super has actually been paid into funds. Track payment status separately, pay via SuperStream by the deadlines, and reconcile quarterly to avoid Superannuation Guarantee Charge exposure.

Employment Documents That Make Payroll Easier

Accurate STP reporting starts with clear rules about pay, allowances and entitlements. The right documents make it much easier to classify payments correctly and avoid disputes.

• Employment Contract: Sets out pay rates, loadings, overtime, allowances and bonus terms in plain English so payroll categories mirror the agreement.
• Workplace Policies: Clarify timekeeping, overtime approval, expense reimbursement and deductions, which flow directly into payroll inputs.
• Privacy Policy: If you collect staff details through onboarding or HR systems, a clear Privacy Policy helps you manage employee personal information lawfully.

It’s also worth maintaining a change log for pay increases, promotions and reclassifications. These records support accurate STP reporting and help if the ATO or Fair Work ever requests evidence.

Workflow Tips To Streamline STP

• Run a single, STP‑enabled payroll system for all pay items rather than spreadsheets or off‑system adjustments.
• Lock pay periods after approval so backdated changes happen via visible adjustments, not silent edits.
• Set reminders for super contribution cut‑offs and your year‑end finalisation window.
• Train managers to use the correct allowance and overtime categories when approving timesheets and expenses.
• Do a quarterly mini‑reconciliation: compare payroll totals to STP reports and fix anomalies early.

If your payroll involves multiple awards, complex allowances or frequent terminations, getting tailored advice early usually saves time and cost later. We can help you put the right employment terms and policies in place so your payroll setup is clear and consistent.

For a broader primer on how the old payment summary system transitioned to STP, you might also find our overview on group certificates helpful to share with your team.

Key Takeaways

• “Group certificates” (payment summaries) have been replaced by STP; employees now access a tax‑ready income statement in myGov after you make a year‑end finalisation.
• Your core obligations are to lodge STP on or before payday, calculate and remit PAYG withholding, pay super on ordinary time earnings by the due dates, and finalise your STP data on time.
• Common risks include misclassifying OTE, mishandling bonuses or leave loading, unauthorised deductions and late or missed STP lodgements.
• Before finalisation, reconcile payroll totals, check employee details, review allowances and termination payments, and correct errors with an update event if needed.
• Clear documents - your Employment Contract, Workplace Policies and payroll procedures - make accurate classification easier and reduce disputes.
• Super amounts reported through STP reflect liabilities, not payment status; pay via SuperStream and reconcile quarterly to stay compliant.

If you’d like a consultation on employment documents and “group certificate” (STP) compliance settings from a legal perspective, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.