Single Touch Payroll (STP) is a new way of reporting tax and super information to the ATO.
The information is sent to the ATO directly from your Accounting software, or through a third part – such as a sending service provider.
STP works by sending tax and super information from your payroll or accounting software to the ATO as you run your payroll.
When you start reporting, you will run your payroll, pay your employees as normal and give them a payslip. Your pay cycle does not need to change, and you can continue to pay your employees, weekly, fortnightly or monthly.
Your STP enabled payroll software will send the ATO a report which includes the information required such as salaries and wages, pay as you go (PAYG) withholding and superannuation information.
Through STP you will be required to report on the following items:
You may choose to include certain withholding payments in your STP report. These are not mandatory. STP offers the ability to streamline your reporting as opposed to have a number a separate reporting processes to assist in efficiencies of real-time reporting and also help with your compliance processes.
You can also choose to include reportable employer superannuation contributions and reportable fringe benefit amounts for your employees.
If you choose not to report these amounts through STP, you will be required to give payment summaries to your employees and a payment summary annual report to the ATO covering these payments.
Voluntary reporting labels:
Some payments cannot be reported through STP and these include:
- Department of Human Services
- Investment bodies and managed investment funds
- Purchasers of certain taxable Australian property
Payments made to contractors are not mandatory under STP. However, if you currently report contractors through your payroll solution, you should continue to do so under STP.
If you report payments to contractors, and you have a voluntary agreement to have withholding applied, you do not need to provide a payment summary to these contractors.
Where the contractors are managed outside of payroll, you do not have to report payments to them under STP.
You will need to determine how you will report through STP:
Each time you report your Single Touch Payroll report, it needs to include the below minimum reporting requirements for you to meet your STP obligations.
Your updated software will capture the data that the ATO require and these include:
By reporting thru STP, you may be exempt from giving payment summaries and a payment summary annual report for the amounts you reported to the ATO.
This information will be available to your employees online through myGov. Your employees can also request a copy of this information from the ATO.
To be exempt from issuing these payments summaries to your employees, you will need to make a finalisation declaration. This declares you have provided all required information for the financial year through your STP reporting.
You will need to provide a payment summary for any payments not reported through STP.
You make a finalisation declaration by providing a finalisation indicator for an employee as part of your STP reporting.
Once you have proceed the finalisation indicator for the employee, the ATO will pre-fill the employee’s income tax return and display the information as ‘tax ready’ in myGov.
There will be no change to the way you are currently reporting your PAYG Withholding either, monthly, quarterly or annually.
There will be no change to the way you are currently reporting and paying your superannuation liabilities if your business is Superstream compliant.
Once your business starts reporting to the ATO through STP, employees will be able to see their year to date tax and super information online. This will be available in myGov.
It is not mandatory to employees to have a myGov account, however, if they want to access their information online throughout the year, they will need one.
Creating a myGov account is easy: MyGov.
Accounting and Payroll software options can connect directly to the ATO which does not require an AUSkey to lodge.
Small Business owners will not need to open a myGov account to be STP compliant.
MyGOV is a whole of government access to services, through one sign-in. It will allow employees to see their superannuation information being reported, as well as STP information that’s been reported.
Employers will not be liable to pay a penalty during the first 12 months, unless the Commissioner first issues a warning notice. Warning notices are intended for those employers who refuse to comply at all.
Yes there are options available, please contact us for more details.
Yes – you can postdate payruns and lodge with the ATO. If any changes are required, these can be done on your return and relodged with the ATO.
Run a payroll and include these employees with a zero pay and then the ATO will receive their year end figures correctly and you will be able to reconcile the end of year wages on the 30th June 19.
To discuss your personal bookkeeping in more detail and to prepare your business for the implementation of STP, click below to book a complimentary bookkeeping consultation with one of our specialists.Schedule Appointment
Stay informed of impacts to your finances