What the Hell is Single Touch Payroll (STP)
There’s been chatter for a while about STP. Here’s a little insight into what it actually entails.
Single Touch Payroll
Single Touch Payroll (STP) is a change to the way employers report their employees' tax and super information to the Australian Taxation Office (ATO).
Using payroll or accounting software that offers STP, employers send their employees' tax and super information to the ATO each time they run their payroll and pay their employees. The information is sent either directly from the software, or through a third party – such as a sending service provider.
Software providers can tell you more about how they offer STP reporting.
https://www.xero.com/blog/2019/02/new-stp-for-smallest-employers/
What Single Touch Payroll means for employees
Here are some of the changes you will see if your employer reports to the ATO through Single Touch Payroll (STP).
You will see your year-to-date tax and super information in myGov. You will see this information by logging in to myGov and accessing ATO online services.
It’s easy to set up and manage a myGov account if you don’t have one. You can now use your mobile number or email address to sign in. It’s not compulsory to have a myGov account, however, you won’t be able to see your year-to-date tax and super information online without one.
Each time your employer pays you, your year-to-date tax and super information will be updated in myGov.
It may take a few days for your myGov information to be updated after your employer pays you. That means the information you see in myGov may not always match what you see on your payslip. Year-to-date information is a total of the payments made by your employer from the start of the financial year.
Your payment summary information will also be in myGov.
Your employer is not obliged to give you an end-of-year payment summary for the information they report through STP (the law has changed).
Your payment summary information will be available in myGov at the end of the financial year.
For more information, click here https://www.ato.gov.au/Business/Single-Touch-Payroll/Single-Touch-Payroll-for-employees/What-Single-Touch-Payroll-means-for-employees/
How does this benefit me as an employer?
The main benefits for employers with Single Touch Payroll is that it will streamline the process of reporting to the ATO by being able to submit payroll information upon completion.
By doing this the ATO will be able to eliminate potential errors and additionally, the need to generate and distribute payment summaries for employees (that’s still a maybe). The ATO may also enable employers to collect tax file declaration and super choice information online via myGov when onboarding new employees.
Source: https://www.easypayroll.com.au/resource-centre/what-is-single-touch-payroll/
Employers with 20 or more employees
STP reporting started gradually on 1 July 2018 for substantial employers (those with 20 or more employees).
Find out if your software is STP-ready by talking to your software provider. Your tax professional can also help.
Employers with 19 or less employees
Legislation to extend Single Touch Payroll to include employers with 19 or less employees is currently before parliament. The Bill has been passed by the Senate with a number of proposed amendments. It has been referred to the House of Representatives to consider the amendments put forward.
For now, you can choose to report through STP. Talk to your software provider to find out what you need to do to update your software and start reporting.
The ATO won’t force employers with 19 or less employees to purchase payroll software if they don’t currently use it. Different STP reporting options will be available by 1 July 2019 to help smaller employers.
A register of software providers who intend to build low-cost solutions is available at ato.gov.au/stpsolutions.
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. Exemptions to STP reporting will also be available if you have no internet or an unreliable connection.
Xero surveyed businesses and Xero partners - a consistent response came through: micro-businesses want to use Xero Payroll for Single Touch Payroll (STP) but some aren’t quite ready to adopt a full accounting-software package.
For that reason, Xero has announced two standalone solutions that will ensure the 400,000 micro-businesses about to fall under the new STP rules remain compliant:
A new Payroll-only product for as many as four employees, with an expected price of about $10 a month
The option for Xero partners to add Payroll to a ledger or GST cashbook subscription covering up to four employees (price to be determined).
It’s the first time Xero will offer Payroll as a standalone product, and will deliver both solutions by 1 July 2019. Both options will feature the full Payroll module, offering the ability to process, pay and report information for up to four employees.
So there will be more information leading up to end of financial year, stay tuned!