If you are an employer you are probably aware that by 1 July this year you will need to set up and start reporting payroll to the ATO in real time (i.e. on the day of payment). If you are not aware then you need to take action now.
Single Touch Payroll (STP) reporting is currently available through payroll, accounting and business management software. Most software providers are offering STP-enabled products. Some providers have asked us for a later start date (a deferral) for their employer clients to report through STP. If you’re not sure whether your software has a deferral, check with your provider.
A number of No-cost and low-cost Single Touch Payroll solutions (less than $10 per month) will be available in the 2018-19 financial year for micro employers (four or less employees).
Please contact us at The Number Factory 03 4367 7443 if you need assistance is either setting up payroll software, or if you would like to discuss package options for us to manage it for you
How STP works
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 (you can continue to pay your employees weekly, fortnightly or monthly)
- your STP-enabled payroll software will send us a report which includes the information we need from you, such as salaries and wages, pay as you go (PAYG) withholding and super information
- see the employer reporting guidelines for a full list of payments that must be reported through STP.
You will be reporting super liability information through STP for the first time. Super funds will also be reporting to us. They’ll let us know when you make the payment to your employees’ chosen or default fund. This is an important step toward making sure employees are paid their correct entitlements.
The way STP information is sent will depend on the software you use. STP reporting will be offered in one of the following ways with:
- an end-to-end solution, which allows you to run your payroll and send the STP information directly to us from your software
- a solution which allows you to run your payroll and send the STP information through a third party sending service provider (SSP) which is integrated into your software
- a solution that allows you to run your payroll and requires you to send the STP information through a third party sending service provider (SSP) outside your software.
ATO systems will match the STP information to our employer and employee records.
Your employees will be able to see their year-to-date tax and super information in ATO online services, which can only be accessed through myGov. Their data is updated every time you report (each pay day for most employers). Without STP reporting, employee data is only reported at the end of the financial year.
If you make mistakes in your STP report, you can correct it in your following report. The ATO won’t penalise you for making mistakes you correct.
At the end of the financial year, you’ll need to finalise your STP data. This is a declaration to the Commissioner to state you have completed your reporting for the financial year.
You will no longer have to give your employees a payment summary for the information you’ve reported and finalised through STP. Once you finalise your data, your employees or their registered agent will be able to lodge their income tax return using the STP information available in ATO online/
You will no longer need to provide the ATO with a payment summary annual report (PSAR) at the end of the financial year for the payments you report through STP.
From 2020 we will pre-fill activity statement labels W1 and W2 for small and medium withholders with the information you report to them through STP. If you currently lodge an activity statement you will continue to do so.