Single Touch Payroll (STP) is a new requirement by law to send tax and super information from your payroll or accounting software to the Australian Tax Office as you run your payroll.
Are you still in the dark about Single Touch Payroll? Need more details? You’re in the right place. Welcome to our FAQ cheatsheet.
When does Single Touch Payroll Reporting start?
A payroll solution is the accounting, business management or payroll software you use to run your payroll and pay your employees.
Single Touch Payroll reporting started on 1 July 2018 for companies with more than 20 employees. This will now extend to companies employing 19 or fewer employees from 1 July 2019. You must have the system in place before 1 July.
How do I know if my systems are STP ready?
For those employers using an STP ready payroll or accounting software package, then the transition should be relatively straightforward. If you’re unsure of whether your payroll solution is supported, then check with your software vendor.
A software product catalogue is available on the Australian Business Software Industry Association (ABSIA) website. The catalogue will be updated as payroll solutions become Single Touch Payroll enabled.
Where applicable, install any software updates for your payroll platform, as they become available.
I don’t currently use STP ready payroll software, what should I do?
Dexterous Group offers fixed-price scalable STP-ready payroll solutions starting from as little as $250 + GST.
What if I report manually?
There is no longer any option to do so as from 1 July, you must switch to a digital accounting platform.
Why is the ATO forcing Single Touch Payroll on all employers?
STP will offer Improved data accuracy, speed, accessibility and greater transparency.
Increased automation will also drive down processing time and cost.
Smarter automated processes will remove the potential of human errors and fraud.
What happens if I don’t comply?
As an employer, you will not be liable to pay a penalty during the first 12 months of STP, unless the Commissioner first issues a warning notice.
Warnings are intended for those employers who refuse to comply, not those having trouble complying by the due date, therefore they should be rare.
How will I (as an employer) benefit from Single Touch Payroll?
With STP, employers can submit payroll information, such as wages, allowances, deductions, PAYG(W) and super, immediately after processing the payroll, eliminating the need for further administration and lodgements at a later date.
Employers won’t need to generate and distribute payment summaries to employees, saving them time and money at the end of the financial year.
With STP, employers will be able to obtain tax file numbers and superannuation information on new employees directly from myGov.
The ATO will be able to pre-fill business activity statements (BAS) – labels W1 and W2 for employers minimising the potential for human error.
How will my employees benefit from STP?
Single Touch Payroll will allow employees to see up-to-date pay, tax withheld, and employer superannuation contributions throughout the year through the ATO’s online service, MyGov.
What about default Super arrangements?
Single Touch Payroll does not affect any existing default, scheduled or preferred super fund arrangements.
Employers should select and communicate the default super fund to new employees at the same time as they ask new employees to complete the Tax File Number Declaration and Choice of Fund forms online.
Additional information on Single Touch Payroll
If you want to read more about the implementation of Single Touch Payroll, you can visit the ATO’s dedicated webpages. Book your free consultation today or contact us by email or call us on +61 2 9167 8880.