Single Touch Payroll Are You Ready?
Single Touch Payroll (STP) is designed to streamline business reporting obligations. It is now an official requirement for every Australian employer. Whether your a small business that employs 1 or 20+ employees, everyone needs to get on board from July 1 2019.
What is Single Touch Payroll?
STP is a government initiative that changes the way businesses report their employee’s PAYG and superannuation information. Employers will now be required to report PAYG and super directly to the ATO after a “payroll event” rather than previously reporting monthly or quarterly.
Currently Single Touch Payroll is in place for businesses with over 20 employees and was brought into effect as of 1 July 2018. Small businesses with less than 20 employees will be required to also use Single Touch Payroll as of 1 July 2019.
What is reported in Single Touch Payroll?
Any information within the payroll process will be reported in STP. This may include, but is not limited to ordinary time earnings, termination payments, parental leave payments, payments of unused annual leave and director payments if subject to PAYG withholding.
What does this mean for business owners?
In essence, nothing will change in how you process payroll. The main thing is that after each “payroll event” your payroll software provider will need to send some additional reporting information to the ATO. This means, every time you do a pay run, you have to send the ATO your STP data. That’s where your payroll software comes in.
As a digital reporting requirement, you will need to ensure you are using an accounting software solution that is Single Touch Payroll enabled.
With STP, the ATO will be able to pre-fill business activity statements (BAS) lables W1 and W2 for employers. This will reduce the potential for human error, which can easily occur when going back over finances, and avoids double handling.
The ATO will now automatically track the figures taken from STP submissions and make them available via online services. This means employees can access their payment information directly via their myGov account. What does this mean for employers? They won’t have to generate and distribute payment summaries to employees, saving them time and money at a crucial time – end of financial year.
The ATO have a great check list to get you ready for Single Touch Payroll which you can find here.
If you have any questions or need help in setting up Single Touch Payroll, you can contact us by phone 0731189505 or email us at firstname.lastname@example.org.