SINGLE TOUCH PAYROLL (STP) BECOMES MANDATORY FOR ALL EMPLOYERS FROM THE 1ST OF JULY 2019.
WHAT DOES THIS MEAN FOR YOU?
If you employee staff, you must be using a STP Compliant software before this date. We use and recommend Xero. Xero are already set up and fully compliant.
DON’T HAVE CLOUD ACCOUNTING YET?
No problem. We can migrate you to Xero easily, efficiently and cost effectively. Get in touch today and we can discuss moving you to the cloud.
ALREADY ON XERO?
That’s simple. We will ensure you are set up and ready to start submitting the STP information to the ATO from the 1st of July 2019.
SO WHAT EXACTLY IS SINGLE TOUCH PAYROLL (STP)?
Single touch payroll (STP) is a new regulation that changes when and how small businesses report payroll activity to the Australian Tax Office (ATO). Businesses used to report this information to the ATO once a year. Now, they need to send a report after each payday. And those reports must be submitted digitally, using a very specific format.
CHANGES TO WHEN YOU REPORT PAYROLL
Small businesses used to finalise their payroll records at the end of the financial year and produce:
- a payment summary annual report for the ATO, stating how much the business had paid in salary or wages, the PAYG withheld, and some superannuation contributions they’d made
- a payment summary for each employee, stating what each employee received in wages or salary, the payroll taxes collected from their pay, and some superannuation contributions made on their behalf.
NO MORE PAYMENT SUMMARY ANNUAL REPORTS
Because you’ll be updating the ATO on a pay-by-pay basis, you won’t need to prepare a payment summary annual report anymore. You’ll just let the ATO know when you’ve made your last pay run of the financial year for your employees.
Payment summaries won’t need to be sent to employees anymore, so employers won’t be required to produce them. The ATO will use single touch payroll reports as the sole record of salary/wages paid, taxes collected, and superannuation contributed.
Your employees will be able to see the information that would normally be on their payment summary by logging on to myGov.
YOU’LL NEED TO REPORT PAYROLL ONLINE
There’ll be no more paper forms for reporting your payroll activity to the ATO. You’ll need to submit the information online, using a specific format known as SBR (Standard Business Reporting). Depending on how you do payroll now, you may need to change software or find a service provider who can produce compliant reports for you.
WHEN IS THE SINGLE TOUCH PAYROLL DEADLINE?
Single touch payroll for businesses with less than 19 employees, comes into effect 1 July 2019.
Recognising the limited time left to the start date of 1 July 2019, these businesses will be allowed to report start reporting any time between 1 July and 30 September 2019 due to a buffer period granted by the ATO during the transition to STP.
Micro employers (1-4 employees) will also have a number of alternate 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.
The official start date will not change, the 30 September deadline has been chosen to give employers more time to make the transition to real-time digital reporting.
Businesses with more than 20 employees switched to single touch payroll on 1 July 2018.
YOUR OPTIONS FOR SWITCHING TO SINGLE TOUCH PAYROLL
To be ready for the switch, you’ll need to make sure you can submit compliant reports every payday.
Here’s what it means:
- If you use online payroll software, it should be able to handle the job. Just make sure it produces ATO-compliant reports.
- If you use desktop payroll software, you’ll need to find a service that can upload your payroll reports, convert them into the ATO’s required format and submit them on your behalf.
- If you use spreadsheets or pen and paper, you’ll need to find a service to convert the data into a compliant digital report format and submit it on your behalf.
If you have any questions about single touch payroll get in touch with us today.