Single Touch Payroll (“STP”) is the most significant change in Australian Taxation Office (ATO) reporting obligations since the introduction of GST. There are some steps that employers, who are not already reporting under STP, need to be take in order to be ready. Please read on below.
What is STP?
STP is a new initiative by the ATO whereby employers are required to report payroll information to the ATO electronically with each pay run. The information reported by employers includes data such as:
- Wages and allowances;
- PAYG Withholding amounts; and
- Superannuation contributions.
As part of the initiative, the ATO will receive data from superannuation funds including receipt of superannuation contributions. This will allow the ATO to closely monitor payment of employee superannuation.
Compliance with STP reporting obligations commence from 1 July 2019 for all employers. Some exemptions apply.
What do I need to do as an employer to be STP compliant?
For employers who already use payroll accounting software such as Xero, MYOB or QuickBooks Online, you will need to connect to ATO services through your payroll accounting system. The detailed steps can be found within the following links:
- QuickBooks Online
- MYOB
- Xero
- Other: Refer to your software provider.
If you use an alternative payroll software provider, it is important to check for compliance with STP obligations as some providers have stated that they will not be updating certain products.
If you are an employer that does not currently use payroll software, you are required to choose a software provider which offers STP compliance. There are a number of providers offering low cost solutions, so please talk to your WMS contact for options.
Benefits
There are additional administration benefits to you, including:
- Elimination of the requirement to lodge a payment summary annual report for payments reported through STP;
- Elimination of the requirement to provide employees with an annual payment summary for payments reported through STP. This information will be available to employees directly through MyGov or their registered agent;
- The ATO anticipates that your activity statements will be prefilled with Gross wages and PAYG tax withheld information by 2020. This will not remove the requirement to lodge activity statements.
Should you have any questions in relation to your STP obligations, please get in touch with your WMS advisor.
