SINGLE TOUCH PAYROLL (STP) Employers with 19 or less employees – it’s time to act.
What is STP?
Single Touch Payroll (STP) is a change in the way employers will report their PAYG and superannuation contribution information to the ATO. Using STP compliant payroll software, employers will now be required to report PAYG and super after a ‘payroll event’ – essentially after each pay to employees has been processed (be that weekly, fortnightly or monthly) – rather than previously reporting monthly or quarterly. This means, every time you do a pay run, you are required to electronically send the ATO your STP data via your STP compliant accounting software.
How does STP benefit employers?
STP will streamline the process of reporting to the ATO. By doing this the ATO will pre-fill the BAS (W1 and W2) for employers, eliminating potential errors and double handling (from 2020 for small to medium withholders).
The ATO will automatically track the figures taken from STP submissions and make them available via online services. This means employers do not have to generate and distribute payment summaries to employees as this information will be made available online via myGov. Finally, the ATO may allow employers to collect tax file declaration and super choice information online via myGov when onboarding new employees.
When will STP come into effect?
STP reporting is mandatory from July 1 2019 for all employers. You must act now to ensure you’re set up with STP compliant software to enable you to start reporting from July 1 2019.
Different STP reporting options are available to help smaller employers. However, the ATO will not force employers with 19 or less employees to purchase payroll software if they don’t currently use it. The ATO have asked software developers to build low-cost STP solutions at or below $10 per month for micro employers – including simple payroll software, mobile phone apps and portals. A register of providers who intend to build these solutions is available at Low-cost STP solutions.
Micro employers (1–4 employees) will also have a number of alternative options that are not available to employers with 20 or more employees – such as initially allowing your registered tax or BAS agent to report quarterly, rather than each time you run your payroll.
For those not currently using accounting software (i.e. those using manual cashbooks or excel)
You’re required to be using compliant software prior to July 1 2019. Highview are here to assist you in this transition – so please reach out to us.
What do I need to do?
Highview are here to help with our clients’ transition to STP. We will be sending out communications to our clients this week to begin the process for those who haven’t already made the required changes or updates to their accounting software. We will support you in selecting the most suitable STP option for your business.
Frequently Asked Questions
Q: Will I still need to submit a BAS?
A: Yes – you’ll still need to submit a BAS, but the W1 and W2 values will be pre-filled (from July 2020 for small to medium withholders).
Q: Will I be able to adjust the pre-filled values on my BAS?
Q: I am a director of a company, will I be required to register for Single Touch Payroll?
A: Dependant on the strategy utilised for your business, you may be required to register for STP and prepare payruns personally. Contact your accountant to discuss your circumstances.
Q: Will I still need to generate payment summaries for my employees?
A: You will no longer need to provide payment summaries to your employees for the payments you report and finalise through STP. Payments not reported through STP, such as Employee share scheme (ESS), will still need to be reported on a payment summary.
Q: Will I still need to submit an annual payment summary report?
A: No, you will not need to submit a payment summary report. Instead you will need to do a finalisation declaration at the end of the financial year. The information you report through STP will not be tax-ready for your employees or their registered tax agent until you make this declaration.
Q: Can I make PAYG or super payments through single touch payroll?
A: No, single touch payroll is a reporting solution only. You will still need to make PAYG and super payments separately.
Further questions? We are here to help.
If you have any immediate concerns in relation to STP, please address these to your Highview Accountant or visit the ATO website for further details: https://www.ato.gov.au/Business/Single-Touch-Payroll/About-Single-Touch-Payroll/
Cranbourne: 03 5990 1000
Prahran: 03 9529 1566
Mornington: 03 5911 2100
Ringwood: 03 8899 9797