What is Single Touch Payroll?
Single Touch Payroll (STP) is part of the Australian Government’s commitment to streamlining employer reporting obligations. It was legislated on 16 September 2016 as part of the Budget Savings (Omnibus) Act 2016.
(Find out more here)
From 1 July 2018 STP is a legal requirement for employers with more than 20 employees to report tax and super information via STP-enabled software or through a registered agent to the Australian Taxation Office (ATO).
How does this affect Small Medium Enterprises?
It will change the way you report payroll information to the ATO. For employers with 19 employees or less, STP will come into effect 1 July 2019. It is mandatory that your current payroll software is updated to be STP-enabled, or you can choose to use a registered agent that can do the STP reporting on your behalf.
How does it work for your Small Medium Enterprise?
You can run your payroll as usual. STP does not affect your pay cycle and you can continue to pay your employees the same way. The following year-to-date information will be sent to the ATO from your STP-enabled reporting software or agent:
- Employee salary and wage information
- Pay as you go (PAYG) withholding
- Superannuation paid
With the new STP reporting, you will no longer be required to lodge a PAYG annual report. Instead, you will need to lodge a finalisation declaration for each employee at year-end through the STP-enabled software.
Preparing for Single Touch Payroll
- Choose a method to report through STP.
Talk to your software provider about how they will offer STP reporting, when it will be ready and what you need to do during the transition. If you’re unsure about how to integrate your current accounting software with STP, Muntz Partners are a registered agent that can help you establish or take care of STP reporting.
- Review your business processes and data.
The transition to STP is a good time to look over your data and check that you are addressing overpayments, calculating super and paying employees correctly. Check your employee information and update the details if necessary, including names, addresses and dates-of-birth.
- Authorisation and declaration.
Each time you send a report, the ATO requires that you declare that the STP report is true and correct. The person submitting the pay event file must make this declaration. There will be a declaration in your STP-enabled software to do this – either a check-box or similar option.
Getting ready for Single Touch Payroll with Muntz Partners
Want to know more about how Single Touch Payroll will affect your payroll reporting? Our dynamic team of highly trained and skilled individuals at Muntz Partners can assist you with setting up STP and making the transition effortless so that you can get on with running your business. Contact us today, click here to get started