What is a payment summary in Australia and has it been replaced?
Yes, the traditional paper "Payment Summary" in Australia has largely been replaced by "Income Statements" through Single Touch Payroll (STP). These statements detail your earnings and tax withheld for a financial year.
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How it works in practice
What is a Payment Summary?
A payment summary, often also called a Group Certificate, is a document that employers traditionally provided to employees at the end of each financial year. It details an employee's total gross income, the amount of tax withheld, and superannuation contributions for that year. This summary was essential for individuals to complete their income tax returns.
The Shift to Income Statements
For most employees in Australia, payment summaries have been replaced by "Income Statements." This change is due to the Australian Taxation Office's (ATO) Single Touch Payroll (STP) system. Under STP, employers report payroll information to the ATO each payday. This information is then made available to employees as an Income Statement through their myGov account linked to the ATO.
Why the Change?
The transition to Income Statements through STP aims to streamline reporting processes for employers and make tax time easier for employees. It provides a more real-time view of earnings and tax withheld, reducing the need for manual distribution of paper summaries and simplifying tax return preparation, as the information is pre-filled directly from the ATO.
Important exceptions
While most employees now receive an Income Statement, some exceptions exist. Employers not yet using Single Touch Payroll, or those with certain closely held payees (e.g., family members of a business owner), may still issue traditional paper payment summaries. Additionally, specific payment types, such as redundancy payments or employment termination payments (ETPs), will still result in a payment summary.
What you should do now
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Verify if your employer uses Single Touch Payroll (STP) to determine if you'll receive an Income Statement or a traditional Payment Summary.
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Access your Income Statement through your myGov account, linked to the Australian Taxation Office (ATO), typically available by late July each year.
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Keep any physical payment summaries you receive, as these are still valid for tax purposes if your employer is exempt from STP or for specific payment types.
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Review your Income Statement or Payment Summary carefully to ensure all earnings, tax withheld, and superannuation contributions are accurate.
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Contact your employer or the ATO if you cannot access your income information or believe there are discrepancies.
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