So, what is Single Touch Payroll (STP)? That is the question I have been asked a great deal lately.
Although, larger businesses have been reporting for the past 12 months, for most small business owners Single Touch Payroll (STP) reporting came into effect on 1 July 2019.
STP is the new way to report salary and wages, PAYG withholding tax and superannuation information to the ATO. Rather than reporting this information to the ATO once a year, employers will be required to report after each pay. This information can only be submitted to the ATO digitally so will require STP compliant payroll software.
In the past, super information has not been reported to the ATO. With the introduction of STP, the ATO will be able to compare the information reported by employers with the payments received by the super funds.
End of year payroll processes will become more streamlined with the introduction of STP. There is no longer a requirement to provide employees with a Payment Summary or lodge the Payment Summary Annual Report with the ATO. Once you have prepared your final pay run for the financial year you will simply need to finalise your STP data. This is a declaration to the ATO stating you have completed your reporting for the year.
Prior to STP reporting, employees would only be able to see their payroll information at the end of the financial year. With the introduction of STP, employees will be able to see their year-to-date tax and super information through myGov. Their information is updated each time they are paid as the payroll information is reported to the ATO.
Reporting is required from 1 July 2019; however, you have until the 30 September 2019 to opt into STP with your chosen payroll software. Feel free to get in contact if you have any questions or need any help setting up your payroll.