ATO REQUIRES ALL EMPLOYERS TO BE SINGLE TOUCH PAYROLL [ STP ] COMPLIANT FROM 1 JULY 2019. LET'S TALK ABOUT THE REQUIREMENTS TO ENSURE YOU ARE READY.
What is Single Touch Payroll?
Single Touch Payroll (or STP) is a change to the way employers report their employees’ tax and superannuation information to the ATO. The intention is to simplify and streamline employer reporting obligations to the ATO.
When will Single Touch Payroll be mandatory?
Employers with 20 or more employees should have already starting reporting through STP from 1 July 2018.
Employers with 19 or less employees need to start reporting any time from 1 July to 30 September 2019. If you need more time you can apply for a later start date.
Deferrals will be granted to any employer who makes a request, if the employer won’t be ready to start reporting by 30 September 2019.
How do employers report?
You can report though STP in one of three ways:
- Report from your existing payroll or accounting software [if STP reporting is available]. If you have a desktop version accounting package – you may need to consider upgrading to a cloud-based accounting/payroll solution that is STP-enabled.
- Ask a third-party provider such as a registered Tax/BAS agent or payroll service provider to report on your behalf.
- Use a No-cost or low-cost Single Touch Payroll solution, for Micro Employers [less than 4 employees] who do not currently use any accounting/payroll solution.
How often do employers need to report?
Through Single Touch Payroll, employers will report their salary/wages, pay as you go (PAYG) withholding and superannuation information directly to the ATO through their STP ready payroll software each time they process a pay run [unless a concession applies].
There is a concession for Micro Employers [less than 4 employees] to ask a registered tax or BAS agent to report their STP information quarterly, rather than each time a pay run is done.
This concession is available for two [2] years [until 30 June 2021] and only applies where the employer does not already use STP-enabled software. After the 2 years, Micro Employers will need to start reporting through STP each pay run.
Employers will no longer be required to provide their employees with a PAYG Payment Summary, and they will no longer need to lodge a Payment Summary Annual Report with the ATO.
Does this change when I need to Pay Superannuation and Pay As You Go Withholding [PAYGW]?
No, you will not need to pay Super & PAYGW at the time your file your STP reports. You will continue to pay Superannuation Guarantee on a quarterly basis and PAYGW when you lodge your monthly/quarterly activity statements.
Will there be penalties for not complying on time?
Employers will not be liable to pay a penalty during the first 12 months for mistakes, missed or late reports.
Exemptions from STP will be provided to employers experiencing hardship, or in areas with intermittent or no internet connection.
What does Single Touch Payroll mean for employees?
Single Touch Payroll will allow employees to see up-to-date pay, tax withheld, and employer superannuation contributions throughout the year through their MyGov account.
Employees will no longer receive a PAYG Payment Summary from their employer at the end of the financial year.
Also, check out the resources here for employees.
Where can I find out more?
Please refer to the STP resources section for more information from the major software providers, fill out the form below.
Interested to find out as to what the no-cost and low-cost solutions are for Single Touch Payroll?
Links to set up STP in your software
