What is Single Touch Payroll?

Single Touch Payroll is the new way of completing employee’s wages, tax and super information to Australian Taxation Office from employer payroll or accounting software each time when the payroll is run, and employees receive their wages, tax and superannuation payment. Employers reports are increasingly changing about tax and super information. At the first stage this reporting applies to employers that have 20 or more employees. This reporting commenced from 1 July 2018. The first year will be transitional period and penalties may not apply. Parliament has now passed legislation on 12 February 2019 to spread STP reporting for small employers with 19 or less employees from 1 July 2019.

What does it mean?

The pay run cycle does not need to change. The information will be sent from payroll software as long as it is updated to Single Touch Payroll reporting. It means that an employee’s payroll and super information will be send to Australian Taxation Office each payday when the payroll is done by the employer. Also, each time when the employer pays you, the tax and super information will be updated in employee MyGov accounts. At the same time your employer may not need to provide a Payment summary at the end of the year because all the information will be available from the MyGov account. You can link it to ATO online services and manage your tax and super information in one place. Your payment summary information in MyGov account will be called Income Statement and the ATO will send a notification to MyGov account when the Income Statement is tax ready and after we can complete our tax return with our tax agent.

Extending STP to all employees will help ensure all Australians get their full superannuation entitlements, give great transparency and help ensure a level playing field for small business. This initiate is also an important step in streaming business reporting and keeping pace with the digital age.

How do I get ready?

Most employers with 20 or more employees have already started with STP reporting.

If you are an employer with 19 or less employees, you should contact your payroll solution provider to see if they are STP compliant and ask them to assist with implementing STP in your payroll software.

If you do not have a payroll solution, ATO is working with software providers to develop low and no-cost reporting solutions including simple payroll solutions, portals and mobile apps. These solutions will suit micro employers (1-4 employees) who need to report through STP and will offer a number of options.

Small employers can start reporting any time from the 1 July start date to 30 September 2019. Also, for those employers there will be no penalties for late reports and errors in the first year.

You need to include the following employees in your headcount:

  • Full time employees
  • Part time employees
  • Casual employees who are on your payroll on 1 April and worked any time during March
  • Employees based overseas
  • Any employee absent or on leave (paid or unpaid)
  • Seasonal employees (staff who are engaged short time to meet a regular peak workload, for example harvest workers).

Do not include any employees who ceased work before 1 April, casual employees who did not work in March, independent contractors, staff provided by a third party labour hire organization, company directors, office holders or religious practitioners.

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