Single touch payroll

14/06/2019
Taxation

Single Touch Payroll is a way of sending tax and super information to the ATO from your payroll or accounting software each time you pay your employees.

When you start using STP software:

  • you will run your payroll, pay your employees as normal, and give them a payslip
  • your pay cycle does not need to change (you continue to pay your employees weekly, fortnightly or monthly)
  • your STP-enabled payroll software will send the ATO a report which includes the information they need, such as salaries and wages, pay as you go (PAYG) withholding and super information

You will be reporting super liability information through STP for the first time. Super funds will also report to the ATO. They will advise the ATO when you make the payment to your employees’ chosen fund. This is important to make sure employees are paid their correct entitlements.

Employers with 20+ employees (large employers)

STP became mandatory on 1 July 2018 for large employers with 20 or more employees. You should already be reporting through STP, or have a deferral in place.

If you have more than 20 employees and do not have your STP activated, please contact us to review your current payroll software to ensure ongoing compliance.

Employers with 5-19 employees (small employers)

Small employers must start STP reporting from 1 July – 30 September 2019. If you use payroll software which offers STP, you can update your product and start reporting any time. If you won’t be ready to start reporting before 30 September 2019, you will need to apply for a deferral. The ATO’s form is available as an online pdf, contact us if you need assistance.

Employers with 1-4 employees (micro employers)

If you have four or less employees you must start STP reporting any time from 1 July – 30 September 2019, however you will have two options.

Option 1: Use a compliant payroll software. The ATO strongly recommends that you upgrade or subscribe to STP compliant online accounting software, which will have the added benefit of streamlining your bookkeeping requirements.

Option 2: To engage P+Y to report your STP data to the ATO on a monthly or quarterly basis. This service will be an additional charge to you and is only available until 30 June 2021, after which date you must use compliant payroll software.

 Single Touch Payroll for employees

The way employers report your tax and super information to the Australian Taxation Office (ATO) is changing.

This reporting change is called Single Touch Payroll (STP) and it applied to employers who have 20 or more employees from 1 July 2018 and will apply to smaller employers (those with 19 or fewer) from 1 July 2019.

If your employer reports through STP, they will send the ATO your tax and super information each time they pay you. Don’t worry; you’ll still be paid the same way. However, there will be some changes for you.

Nicholas Pender
npender@penderacg.com.au