Single Touch Payroll – what is it?

Single Touch Payroll (STP) is an ATO initiative that rquires employers to report payroll activites online.  So, every single time you create a pay run and pay your employees, you will need to file that information with the ATO each pay cycle.

How is this different to reporting these figures on my Activity Statements?

Reporting via STP uses the ATO’s new online system that connects with your payroll software and allows you to file the pay cycle with the click of a button.

What information is being sent to the ATO?

STP is a way of sending tax and super information. the information you report will enclude the salaries and wages, allowances, deductions and other payments, PAYG withheld and superannuation amounts.

Employers who have 20+ employees would already be reporting via STP.  Employers with 19 or less employees will start STP reporting from July 1 2019.
Find out more about your responsibilities regarding STP.

Once you are using STP, there will be the option to complete a finalisation declaration at the end of the payroll year has ended.  Completing this declaration will mean that you are no longer required to issue PAYG Payment Summaries to employees.

What does this mean for me?

As long as you are utilising an STP compliant payroll system and have access to the internet, you will be able to meet your reporting obligations with just one extra click while processing your payroll.

There are a couple of steps required to activate the connection between your software and the ATO – all software that has payroll will have connection wizards and guides to complete this.   The core requirement is that all payroll categories need to be assigned an STP category, and your software is registered to your business, this is normally completed via a phone call to the ATO.

Here are some links to STP guides for the common 4 software packages:

https://central.xero.com/s/article/Set-up-Single-Touch-Payroll-STP

http://help.myob.com/wiki/display/ar/Set+up+Single+Touch+Payroll+reporting

https://www.reckon.com/au/single-touch-payroll/resources/

https://quickbooks.intuit.com/au/payroll/single-touch-payroll/

What if I am not using a payroll software system?

For employers that do not have online software, or currently manually calculate payroll, you will need to change your current procedures.  The ATO has recognised that many micro employers, defined as employers with 1 – 4 employees, do not currently use or maintain payroll software.  As it would be unreasonable to expect businesses to convert their entire systems to a software just to meet an ATO obligation, there are a number of ‘payroll only’ packages set to be released from various software providers.

The ‘payroll only’ software has some ATO requirements – it must cost less than $10/month and there must be no requirement to maintain the software.  There are a number of these types of software currently available, with even more in development with release dates due prior to 30 June 2019.

A detailed list of these Low Cost Payroll solutions can be found here

https://www.ato.gov.au/Business/Single-Touch-Payroll/In-detail/Low-cost-Single-Touch-Payroll-solutions/

What do I need to do right now?

If you are an employer who had 20 or more employees at 1 April 2018 – you should already be reporting using STP. If you are not currently reporting, please review your payroll software and activate STP to commence reporting.

If you had less than 20 employees at 1 April 2018, it is time to start planning!  If you do not currently use payroll software, we recommend you start looking at payroll options so that you are ready for the 1 July 2019 STP commencement date.

ATO links

https://www.ato.gov.au/Business/Single-Touch-Payroll/About-Single-Touch-Payroll/

https://www.ato.gov.au/Business/Single-Touch-Payroll/Get-ready-for-Single-Touch-Payroll/

https://www.ato.gov.au/Business/Single-Touch-Payroll/Report-through-Single-Touch-Payroll/

https://www.ato.gov.au/Business/Single-Touch-Payroll/Single-Touch-Payroll-for-employees/

https://www.ato.gov.au/Business/Single-Touch-Payroll/News,-events-and-resources/

https://www.ato.gov.au/Business/Single-Touch-Payroll/In-detail/Single-Touch-Payroll-employer-reporting-guidelines/

Single Touch Payroll (STP) – what it means for you