SINGLE TOUCH PAYROLL
Single Touch Payroll (STP) is a fairly new compliance introduced by the Australian Taxation Office (ATO).
It requires employers to send live pay run feeds to the ATO at the same time they process the run for their staff. Information in the pay runs include all salary, wages, taxes withheld and superannuation payments.
YOU AS AN EMPLOYER
As a business owner & employer you would be familiar with finalising payroll reports at the end of the financial year. These reports include Payment Summary Annual Report (PSAR) and individual payment summaries.
As STP requires you to send live pay runs to the ATO throughout the year, PSAR and payment summaries at year end will become unnecessary. During year end however, the ATO will require you to prepare a Finalisation Declaration form in order to authorise the presented information for tax use.
As an employer you have the option to continue using your payroll software provider (given they are STP compliant or move to another provider who is).
MICROEMPLOYERS (1-4 EMPLOYEES)
The ATO have recognised that many small businesses who employ 4 or less staff don’t use any type of payroll software when processing through their pay runs.
They have provided relief in forcing these micro-employers to pay for payroll software in order to be compliant with STP.
Instead, the ATO are working with payroll software providers to negotiate cheaper and more affordable solutions that can assist these micro-employers with STP.
YOU AS AN EMPLOYEE
As an employee, having the ATO receive your live pay run feeds means that you have access to this information via the ATO Online Services (myGov). The ATO also have readily available information of how much superannuation should have been paid to your superfund ensuring that your employer stays compliant (recently Degani Café were fined thousands for failure to pay superannuation to their employees – check out the article in our blog list).
STP also allows you to keep up-to-date with all your income earned during the year without having to find your PAYG Summaries that has been tucked away in your pile of paperwork
The first phase of implementing STP started back on the 1st July 2018 for businesses that employed more than 20 staff. This was the mandatory date for businesses to set up their appropriate software in order to stay compliant with the ATO.
The second phase is scheduled to become mandatory on the 1st July 2019 for businesses that employ 19 or less staff. This announcement was made by the Australian Government passing legislation on the 12th February 2019.
Despite the mandatory dates above the ATO have stated that they will be flexible, working together with STP providers and tax agents in order to assist small businesses transitioning to the new system.
The ATO have also advised that penalties for the first 12 months will not be emitted for failure to comply with STP.
Learn the steps you can take as an employer or employee, speak to our trusted tax specialist in order to help you get up-to-date with STP and learn more about how you can become compliant with the ATO today.
One affordable and flexible software provider is easy Xero. Contact us for more assistance on how to get started.
Steven Wong Accountants
Accounting for Growth