All you need to know about Single Touch Payroll
Single Touch Payroll (STP) becomes mandatory for ALL Employers from the 1st of July 2019.
What does this mean for you?
If you employee staff, you must be using a STP Compliant software before this date. We use and recommend Xero in our firm and they are set up and fully compliant already.
Not using cloud software yet?
Never fear. We can move you onto Xero easily and at a low cost. Reach out today and let’s discuss moving you to the cloud.
Already on Xero?
Then it’s simple for you. We will ensure you are set up and ready to start submitting the STP information to the ATO from the 1st of July 2019.
But what is Single Touch Payroll you ask?
Read below to find out more..
Single touch payroll (STP) is a new regulation that changes when and how small businesses report payroll activity to the Australian Tax Office (ATO). Businesses used to report this information to the ATO once a year. Now, they need to send a report after each payday. And those reports must be submitted digitally, using a very specific format.
Changes to when you report payroll
Small businesses used to finalise their payroll records at the end of the financial year and produce:
a payment summary annual report for the ATO, stating how much the business had paid in salary or wages, the PAYG withheld, and some superannuation contributions they’d made
a payment summary for each employee, stating what each employee received in wages or salary, the payroll taxes collected from their pay, and some superannuation contributions made on their behalf.
No more payment summary annual reports
Because you’ll be updating the ATO on a pay-by-pay basis, you won’t need to prepare a payment summary annual report anymore. You’ll just let the ATO know when you’ve made your last pay run of the financial year for your employees.
Payment summaries won’t need to be sent to employees anymore, so employers won’t be required to produce them. The ATO will use single touch payroll reports as the sole record of salary/wages paid, taxes collected, and superannuation contributed.
Your employees will be able to see the information that would normally be on their payment summary by logging on to myGov.
You’ll need to report payroll online
There’ll be no more paper forms for reporting your payroll activity to the ATO. You’ll need to submit the information online, using a specific format known as SBR (Standard Business Reporting). Depending on how you do payroll now, you may need to change software or find a service provider who can produce compliant reports for you.
When is the single touch payroll deadline?
Small businesses with fewer than 20 employees don’t have a confirmed deadline for switching to single touch payroll. However, small business advisors expect it to be compulsory from 1 July 2019. Businesses with more than 20 employees switched to single touch payroll on 1 July 2018.
Your options for switching to single touch payroll
To be ready for the switch, you’ll need to make sure you can submit compliant reports every payday.
Here’s what it means:
If you use online payroll software, it should be able to handle the job. Just make sure it produces ATO-compliant reports.
If you use desktop payroll software, you’ll need to find a service that can upload your payroll reports, convert them into the ATO’s required format and submit them on your behalf.
If you use spreadsheets or pen and paper, you’ll need to find a service to convert the data into a compliant digital report format and submit it on your behalf.
We can answer your questions about single touch payroll. Book an appointment now.