Single Touch Payroll (STP) is a new method of reporting tax and superannuation information to the ATO. Your payroll or accounting software can potentially offer STP reporting and will result in you sending your employees’ tax and super information to the ATO each time you run payroll and pay your employees. However, how you pay and how often you pay your employees will not change.
If you do not use software or it does not support STP, there are other potential options such as no-cost and low-cost solutions for STP.
If you are uncertain whether your payroll or accounting software offers an STP solution, contact your software supplier to see if this is available.
Why Single Touch Payroll?
The solution provides a more streamlined and up-to-date method of reporting to ensure that employers are meeting their obligations. This means that super liability information is reported to the ATO and informs them when a payment to your employees’ chosen or default super fund is made. This is an important step towards ensuring employees are paid the correct entitlements.
When Does Single Touch Payroll Start?
If you are a small business with 19 or fewer employees, you will need to report through STP from 1st July 2019.
For larger employees (20 or more), you should now be reporting through STP already, unless you have applied for a later start date.
There are special rules and options for STP micro employers (1 – 4 employees).
What are the Benefits of Moving to Single Touch Payroll?
Single Touch Payroll For Employees
Previously, employees were only able to tax information at the end of the financial year, however, by accessing myGov, they are now able to access their year-to-date data whenever they would like. The benefit of this also means that employers will no longer need to issue employees a payment summary. Employees or registered agents such as accountants will be able to lodge their income tax return using the STP information available in the ATO online.
Single Touch Payroll For Employers
Reporting becomes much more streamlined such as PAYG payroll reporting (STP reporting), which is combined with your pay run process. This gains employers valuable time during the end of the financial year period.
The ATO also pre-filled PAYG withholding payroll fields W1 and W2 in your BAS, eliminating potential errors and double handling.
Finally, for new employees, they can be on-boarded quickly with online commencement forms such as Tax File Number Declaration and SuperChoice.
Please note that every effort has been made to ensure that the information provided in this guide is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to contractors. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal or tax advice. You should, where necessary, seek your own advice for any legal or tax issues raised in your business affairs.