What does Single Touch Payroll mean for my business?
Not sure what the changes are or how they will affect your business? We have put together some information below to help you understand Single Touch Payroll (STP).
What is STP?
Single Touch Payroll will change the way you report your employees’ payroll information to the ATO. You will report payments such as salaries and wages, Pay As You Go (PAYG) withholding and super information to the ATO when you pay your employees.
When does STP commence?
- Employers with 20 employees or more – STP started from 1 July 2018.
- Employers with 19 employees or less – Legislation to extend STP to include employers with 19 or less employees was recently passed by parliament starting 1 July 2019, however is yet to receive Royal Assent.
What will STP do?
Details of salary and wages and PAYG withholding amounts will be pre-filled on your activity statements at label W1 and W2, (if these figures are incorrect you will still have the ability to adjust them).
Employers will not be required to provide employees with payment summaries at year-end as the Tax Office will provide the details through the employee’s MyGov accounts. Employees will also be able to access their tax and superannuation details through their MyGov account as information is reported by STP.
Exemptions and Deferrals
Micro employers (1-4 employees) will have a number of alternative options that are not available to employers with 20 or more employees.
- Allowing your registered tax agent to report quarterly rather than each time you run your payroll.
- The ATO are also working with software providers to develop low cost payroll software options.
- Employers who run their business in an area with no internet service or unreliable internet service can request and exemption for one or more financial years.
Reporting through STP
If your payroll software is STP enabled there are a few steps you will need to follow before you lodge your first report:
- Check that you have authorised the right person in your business to lodge an STP report on your behalf.
- Provide the ATO with your SSID if you are using cloud-based or online software.
For more information regarding the changes to Single Touch Payroll, visit the Australian Taxation Office website. For tailored advice on these changes and how they affect your business, please contact your advisor or accountant.