Are you ready for Single Touch Payroll?
The introduction of STP provides a great incentive for organisations to look at and improve internal processes and potentially review their payroll software for a more compliant reporting model. Greater efficiency through better digital payroll processes and solutions can only be better for your business. Our office can help you review your payroll processes, including your end of year processes to make your transition to STP reporting as smooth as possible.
STP works by sending tax and super information from your STP-enabled payroll or accounting software to the ATO as you run your payroll.
- run your payroll
- pay your employees as normal
- give them a payslip.
Your pay cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly. Your STP-enabled payroll software will send us a report which includes the information we need from you, such as: salaries and wages, pay as you go (PAYG) withholding and super liability information.
At the end of the financial year you'll need to finalise your STP data. This means you are making a declaration that you have completed your reporting for the financial year. Once you finalise your data, your employees' Income statement in ATO online services will be marked as 'Tax ready'. They, or their registered agent, will use the Income statement to lodge their tax return.
You won't need to provide us with a payment summary annual report for the payments you report through STP. If you currently lodge an activity statement (eg a BAS with wages data) you will continue to do so.
If you have 19 or fewer employees the Australian Taxation Office (ATO) is showing some patience in allowing a delayed start to STP and being lenient on any errors. The ATO has made it clear that this “soft approach” will only be for the first year of STP.
For micro employers with one-to-four employees, there are low-cost and no-cost solutions available. You can view the list of registered products at: ato.gov.au/stpsolutions
Employers with 1-4 employees will also have the option for their registered tax or BAS agent to report their STP information quarterly, rather than each time they run payroll. This option will be available until 30 June 2021.
Small employers who haven’t yet transitioned to STP can follow these steps:
- Visit ato.gov.au/stp for initial information.
- If you have payroll software, speak to your provider to find out if your product is ready or when it will be.
- If you don’t have software, choose a product that offers STP. You can ask your registered tax or BAS agent for advice on choosing a product that suits your business needs.
- Update your payroll software when it’s ready.
- Start reporting to the ATO through STP.
- Visit ato.gov.au/stp for information, resources, news and detailed guidelines.
- Go to the ATO website: https://www.ato.gov.au/Business/Single-Touch-Payroll/
- Contact your software provider
- Contact our office