Single Touch Payroll (STP) is Now Required for All Employers
Single Touch Payroll is a Government initiated change in reporting obligations for all employers. Initially, large employers were obliged to report from 1 July 2018. Now, ALL employers must enter into the reporting system from 1 July 2019.
Who is it for?
- Employers with more than 20 employees should already be in the system and reporting each pay run.
- Employers with less than 20 employees must enter STP as of 1 July 2019, as legislation has now been passed.
- Micro employers with four or less employees will have additional (easier) options for reporting.
What is it?
Employers must submit payroll and superannuation data to the ATO each time employees are paid. The ATO refers to this as a pay event.
How does it work?
All the major accounting and payroll software providers are now compliant with the reporting requirements. They are currently working on offering low-cost solutions for micro employers.
Employers who do not use payroll software with the reporting capacity already built in can lodge via a Standard Business Reporting (SBR) provider such as GovReports.
All pay events must be lodged electronically.
What does it mean for employees?
This does not change payments, entitlements or pay slips for employees.
Employees will however be able to see all year-to-date payroll information online through their individual myGov account.
It will no longer be required to provide payment summaries to employees, as this information will also be available online.
Individual tax returns will be pre-populated with payroll data lodged through STP.
Although it is not yet obligatory for an individual to have a myGov account, it seems that if an employee wishes to access all their payroll information online, they must have a myGov account. This will certainly be the easiest option for both employers and employees.
Now is a good time to check that you are paying employees in accordance with the relevant modern award or other industrial instrument requirements and that you are withholding tax and accruing superannuation correctly.
If you do your own payroll and will be submitting the pay event information to the ATO yourself, check this link for all you need to know about reporting STP: ATO Report through Single Touch Payroll.
Visit Single Touch Payroll – What is it? for more information.
Make it easy—report STP through Xero payroll and your BAS agent
If you have a registered agent either managing or assisting with your payroll, the agent will need an authority form from you the business owner to represent you to the ATO when lodging STP.
For most employers, an annual authorisation is allowed that will declare that the information provided is ‘true and correct’.
A separate authorisation will be required for the end of year finalisation declaration before payment summaries are issued to employees.
For more detail: ATO Single Touch Payroll