To put it simply, the BMS ID is for payroll software in Australia. It’s used to manage the reporting of payroll information to the ATO via Single Touch Payroll (STP).
Here’s the good news:
- The BMS ID is automatic and set by Accentis Enterprise (or other software vendor) from the ATO
- Once it has been set, it cannot be removed or changed
- It’s a simple process that takes less than a minute
- You don’t need to remember the number once it is set
What is a BMS ID?
BMS ID is an acronym for Business Management Software Identifier.
The BMS ID is a unique number, used to distinguish employees within an ABN or Branch. It’s set at the database level of each payroll instance.
A single business can have one or many ID numbers, depending on how they configured their payroll. Some businesses will have a separate payroll for each client, and the ATO allocates a new ID for each one.
Why do I Need a BMS ID?
A unique number allows the ATO to know the correct amounts an employee gets paid Year To Date (YTD). Due to Australia having an abundant supply of payroll software vendors, the ATO needed a way to work it out.
When data gets sent to the ATO for payroll, it includes a lot of identifying employee information. Name, DOB, address, phone and email are all sent to help match your tax record.
There’s also internal business references, such as the employees payroll ID (employee number). As well as external references, such as the ATO reference of the employees Tax File Number (TFN).
A single ABN may pay an employee from two different payrolls. The payroll ID, and all other identification information is also the same. The employee might know their own YTD figures, and so might the business, but how does the ATO?
The BMS ID allows the ATO to reconcile the correct YTD figures for each employee, no matter the payroll. This ensures from the ATO side of things, that the correct amount of tax gets paid by the individual.
Rules for Reporting Employee Information
The business rules for reporting employee information are:
- Where an employer has branched for PAYG withholding purposes, the employer must report separate payroll events for each PAYG withholding branch established with the ATO
- An employer may choose to report separately for each instance of a payroll solution by allocating a unique BMS ID. This could be where an employer runs more than one payroll solution and separately identifies the same employee in each solution as a unique payroll record.
- For an employer who pays their PAYG withholding with their BAS, the ATO will aggregate W1 and W2 across all BMS IDs for pre-filling of the employers BAS.
- Where an employee is recorded more than once under the same ABN/Branch/BMS ID, then each instance of the employee must be reported, using a unique Payee Payroll ID. These separate Payee payroll IDs will be treated as a separate instance for Single Touch Payroll reporting and must have, separate YTD amounts for Payee Payroll ID. For example where an employee works within an organisation under two separate roles/awards, the employee can be reported under multiple Payee payroll IDs within a single payroll event.
The BMS ID is an important part of reporting employee payments through STP to the ATO. The good news is that it is mostly all set up for you already, or if not, it’s usually automatic. The ID allocated to you is not transferable.
Single Touch Payroll became mandatory for all Australian businesses on July 1st, 2019. If you need some advice or want a different STP solution, check out Accentis Enterprise.
We offer SMBs advanced ERP features to help you grow your business. We streamline your processes to automate where possible and save you time and money.
Contact us to learn more about Accentis Enterprise and improving your payroll and more!
Are you ready to make more money for your business?
Click here to start your journey today!