The short answer is yes. As of 1 July 2019, Single Touch Payroll (STP) is a requirement for all Australian businesses.
With constantly changing updated from the ATO, STP can be a tricky concept to understand. To help you learn what you are required to do, we have put together some frequently asked questions and answers:
- What is STP? STP is a way to instantly report tax and super information to the ATO. When you run your payroll and pay your employees, you will send your employee's tax and super information straight to the ATO. This is an initiative by the ATO to keep a track of income over the course of the year, limiting the need to rely on end of year reporting by employers.
- How do I send my STP information to the ATO? You can send the information directly through most payroll or accounting softwares or through a third party sending service provider. If you are a micro employer (less than five employees), you might be able to use future no-cost and low-cost STP solutions that are $10 or less per month. You can find out what options are available, or will be available, here. If you are a micro employer, you also have the option for your registered tax or BAS agent to report your STP information quarterly, rather than each time you run payroll. Unfortunately, this option is only available until 30 June 2021.
- Am I the only one reporting superannuation information? No, the ATO requires that you and the super fund provider report to them. This way, the ATO will be made aware when you have initiated a payment to your employee's super fund, and can ensure they are paid the correct entitlement.
- Can my employees see what I have entered? Yes, your employees will be able to access year-to-date tax and super information through their MyGov account.
- What if I make a mistake? If you make a mistake in a STP report, you can just correct it in your following report. The ATO won't penalise you for correcting this.
- Does this change end of year tax processes at all? Yes, in the way that you will no longer need to give your employees a payment summary for information you have reported to the ATO. You will also no longer need to provide the ATO with a payment summary annual report at the end of the financial year.
- I'm worried I won't be ready to start reporting by 1 July. What can I do? To help introduce STP to employers, the ATO have given you from the 1 July to 30 September to start reporting. The sooner you start, the more familiar you will be before it is mandatory. If you are still not ready to start reporting by 30 September, you can also apply for a deferred starting date with the ATO. We recommend getting in touch with us so we can help you through this process.
We hope that has helped you understand STP. If you would like more information, or some assistance in setting up your STP solution, give us a call today on (02) 4990 3775 and one of our friendly staff will help you.