The introduction of Single Touch Payroll (STP) this financial year is a game changer. It’s an important shift in the way businesses report to the ATO.
Employers with 20 or more employees should have been using STP since 1 July 2018 unless they had an extension. Employers with 5 or more employees need to start using STP by 30 September 2019. Employers may find that they need to upgrade or replace their payroll system to be able to meet their STP reporting obligations.
Have you set up STP in your accounting software? Have you done everything you need to meet your obligations? Do you need to apply for a deferred start date?
We have put together some important things you need to know about STP, to make sure you meet the deadline.
Single Touch Payroll (STP) is a streamlined payroll reporting system. Using payroll software, you will send your employees’ salary and wages, pay as you go (PAYG) withholding and super information to the ATO each time you pay them.
This means pay runs and compliance are combined into one process, simplifying your reporting – which is good news! It gives you back valuable time at the end of the financial year. It also leaves less room for human error.
Another benefit – you don’t need to provide payment summaries to your employees or lodge a payment summary annual report to the ATO. Employees will be able to access this information direct from their MyGov account.
Many accounting systems like Xero and MYOB are already “STP enabled” so if you already do your payroll using them then it is easy to set up, Otherwise you will probably need to upgrade your accounting and/or payroll system. Talk to our team for help.
The ATO has put together a ‘get ready’ checklist to help with the transition.
The first step is to determine how you will report through Single Touch Payroll. This may depend on the size of your business, and if you currently use payroll or accounting software.
You can report through a Single Touch Payroll-enabled solution.
If you don’t use software, come and talk to us for advice on choosing the right product to suit your business needs.
Alternatively, as your Tax Agent we can lodge the STP details for you.
(Note: Employers with four or less employees are eligible to choose a no-cost or low-cost solution from certain companies..)
Find out how your payroll software provider will offer STP reporting – this may be through an update to your existing software, or an additional service.
Older software products, such as those purchased off-the-shelf, may not be updated to offer STP reporting. Your provider will tell you which of their products offer STP.
Check the right people in your business know about STP – especially the person or people responsible for running your payroll.
This is also a good time to ensure you are:
Let us know if you need any help. If you make a mistake, you will be able to make corrections. The first year is a transitional year and penalties will generally not apply.
Here is a full employer fact sheet from the ATO, to help make sure you meet all your obligations.
If you are a business employing between 5 and 19 people, and you won’t be ready to start reporting before the 30th of September 2019 – you will need to apply for a deferral.
Employers with 20 or more employees should already be reporting through STP, or have a deferral in place.
If you have closely held payees (only family members) you don’t need to start reporting until 1 July 2020.
If you need support through the transition, or are looking to work with someone who can manage your reporting for you, we can help.
We provide payroll and bookkeeping services, so that you can rest easy knowing all your STP is being done set up by experts. It also means you can get back to doing what you do best – running your business.
Contact us today to make an appointment, we’d love to work with you.