Single Touch Payroll

So by now most (hopefully all) employers have heard of Single Touch Payroll (STP), the new way of reporting payroll information to the ATO. Single Touch Payroll allows the ATO to see if each employer is compliant with calculating and paying superannuation and withholding the correct amounts of tax from employee wages. STP allows businesses to send their payroll data to the ATO either directly from their accounting/payroll software or through a third party STP solution.

The question I get asked is "Do I have to use Single Touch Payroll?". Well the answer is yes! If you employee 20 or more employees you should already be setup and using STP. If you employee 19 or less employees you need to be setup and using STP for all payroll activity from July 1 2019.

Setting up STP is relatively easy if your business is using accounting or payroll software that offers STP reporting. Otherwise, you can use a third party Sending Service Provider to send the information to the ATO. The ATO provides links to the STP Product Register here. This register also provides information on no-cost and low-cost STP solutions.

It is important to note that not all accounting and payroll software providers offer STP reporting. These include some off-the-shelf or desktop software. Contact your software provider to find out if their product offers STP reporting.

Before transitioning to STP reporting it is important that your payroll information and process for wages, salaries, superannuation, tax and employee details are correct and compliant. Maintaining accurate employee information such as addresses, tax & superannuation information and dates of birth is vital in successful STP reporting. The ATO provide guidelines for Single Touch Payroll Employer Reporting here.

As well as checking your payroll information and process, employees should be notified of the changes coming and how it will impact the way they access their information and report to the ATO. The information the employee will be able to access includes the amount of Super that has been calculated and paid by the employer and year to date amounts of wages, deductions, tax and allowances. This information can be accessed online through the employees myGov account. Employees don't have to have access to myGov, they can access super information from their super fund's website and their accountants will have access to their tax records.

So, what changes for employees? Employers no longer need to provide employees with an End of Year Payment Summary (formally, Group Certificate). The employee or their Tax Agent can prepare the tax return by using the Employment Income Statement provided by the ATO either by accessing myGov or through the Tax Agents tax preparation software. Although employers no longer need to supply employees with a Payment Summary, they do still need to provide a payslip to the employee each payday as this has additional information that must be provided.

If you require help with setting up STP for your business or want further information Contact our experienced BAS Agents at Count Us In Bookkeeping and Business Services.