How Single Touch Payroll will impact you
Updated: Feb 7
Single Touch Payroll or STP is a new regulation that will change how information such as wages, super contributions, PAYG withheld etc is reported to the ATO. Before STP was introduced businesses previously reported such information to the ATO once a year. The reports then would be submitted to the ATO digitally in a specific format.
How STP will impact when you report payroll Previously small businesses would finalise their payroll records at the end of the financial year. They would need to generate and submit to the ATO a:
Payment Summary Annual Report. The report would state the amount of wages the business paid, PAYG withheld and superannuation contributions the business made
Payments Summary/PAYG Summary for each employee. The PAYG summary would contain information such as the total salary that was paid to the employee, payroll taxes that was collected during the year and the superannuation contributions the employer contributed
The introduction of STP means that businesses will no longer need to issue a Payment Summary Annual Report or Payment Summaries to each employee.
Why payment summary annual reports are no longer needed
STP requires employers to report payroll information to the ATO on a pay-by-pay basis, this removes the need for a payment summary annual report. Instead the employer will advise the ATO once they have made the last pay run of the financial year for their employees. Why employee payment summaries are no longer needed The ATO will use STP payroll reports as the single source of information regarding each employee’s wages paid, taxes collected and super contributions. This will remove the need to issue employees with payment summaries. Employees can access the information that used to be contained in payment summaries through their myGov account. Online Reporting Paper forms for payroll activity will become a thing of the past. Employers will need to submit the information digitally using the SBR (Standard Business Reporting) format. Businesses will need to check how they are currently completing payroll. Businesses may need to change/upgrade their software or find a service provider that will be able to generate reports that are compliant with the ATO’s standards. STP Deadline Businesses with less than 20 employees do not have a STP deadline at current. Small Business Advisors predict that STP will become compulsory from 1 July 2019. For businesses with more than 20 employees, STP commenced on 1 July 2018. How to be STP ready Businesses will need to ensure that they have the software/service provider that will enable them to submit compliant reports every payday.
Businesses using online payroll software will need to ensure that the software can produce ATO compliant reports.
Businesses that use a desktop payroll software will need to find a service provider that can convert the report so it is compliant, and upload and submit the reports on the businesses’ behalf
Businesses that use spreadsheets or pen and paper will need to find a service provider that can convert the data into a compliant report and upload and submit the reports on the businesses’ behalf
Depending on what method your business is using you may need to find a new service provider or switch to a software provider that is STP enabled and compliant. Please contact us on firstname.lastname@example.org or 02 9299 7044 if you have any questions regarding STP.