What is STP and How will it Affect You?

June 21, 2019

STP or Single Touch Payroll is changing the way employees report to the Australian Taxation Office (ATO) and it will become mandatory for all employers from 1 July 2019.

For those with 20 or more employees, you should already be reporting STP, for those with under 20 employees, below are a few tips to help make sure you are STP ready.

About Single Touch Payroll

Each time you pay your employees you will need to report the year-to-date salary and wage information, PAYG withholding and super information to the ATO.

STP does not change your payroll cycle or PAYG withholding and super contribution payment due dates
Full details of mandatory and voluntary information to be reported on STP can be found in the ATO guidelines – click here
If there is an error in your lodged reports you will have to lodge an update event within 14 days of identifying the need to correct or in the next regular pay event where the affected employee(s) have continuity of employment

Employers will no longer be required to provide Payment Summaries at the end of the financial year, payments will be included on a finalisation declaration. This declaration is made by providing a finalisation indicator for an employee as part of your STP reporting. Your employees will then be able to view this information as ‘tax ready’ in myGov
Superannuation liability information will be reported through STP. Super funds will also report to the ATO once payments have been made. This does not change your existing SuperStream obligations

What are the benefits of Single Touch Payroll?

As a result of STP legislation, countless small business is required to report their payroll information to the ATO digitally. That means it’s now mandatory for all employees – whatever their size, to adopt a compliant STP payroll or reporting solution, which will likely be software based.

How will you report through STP?

Your accounting or payroll software may already offer STP reporting as part of your existing software or as an additional service
You may ask a third party such as a registered Tax or BAS agent to report on your behalf through STP enabled software for you
The ATO provides a list of no-cost and low-cost STP solutions

Make sure you are STP ready

To make sure your business is STP ready, follow the guide below:

Check your employee records are accurate and complete in your STP software. This is also a good time to review your pay templates to make sure superannuation, PAYG withholding and other payment amounts are calculating correctly
Declare the information is true and correct each time you submit a pay event or an update event through STP, so ensure you have a standard process in place to verify this data
Ensure you talk to your key staff who will be responsible for running your payroll and make sure they have any necessary authorities in your payroll software
Once you submit your first pay event, you should be able to check your software for a successful status indicating the report was sent to the ATO. You can check the ATO Business Portal for prior lodgements (allow 72 hours for processing)

Want to know more?

Looking to learn more about Single Touch Payroll? If you have any queries or need assistance in preparing your business for Single Touch Payroll changes, get in touch with us know. Our professional Sunshine Coast bookkeepers will assist you with your queries and STP setup.

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