On 1 July 2018, Single Touch Payroll (STP) came into effect, aligning your reporting obligations to your payroll processes. In short, it is streamlining the reporting of salaries and wages, super contributions, PAYG withholding and other deductions made at the time of processing employee payrolls.
What is Single Touch Payroll?
Single Touch Payroll is the submission of your reportable obligations at the time of processing your employee payments to the commissioner, rather than during annual reporting periods. You do this via your current accounting software.
Who does it apply to?
Single Touch Payroll applies to all businesses with 20 or more employees as of 1 April 2018. Count your employees who were active payroll members as at this date to get your number. You do not have to report to the ATO how many employees you have however. This is merely to ascertain whether you fall into the new laws.
Employees are categories as full time, part time, casual, staff on leave (paid or unpaid), employees based overseas or seasonal employees. It does not include contractors, staff provided by a third party or employees who ceased employment prior to 1 April.
How do we use STP?
As we touched on before, Single Touch Payroll is processed through your accounting solution. Most accounting software developers have been busy installing the new system in order to provide this service to their customers. Please check your current software provider if they are STP-enabled. You should be using this from 1 July 2018, however you can apply for an extension under extenuating circumstances.
Why the change?
STP was introduced to link with My Gov. The new process allows payroll data to be linked with employees My Gov accounts so it can be accessed at any time. It is streamlining the process and providing clearer visibility on year-to-date tax and super information. The aim is to eliminate the need for payment summaries come tax time as the information is readily accessible throughout the year on My Gov.
Further details can be found on this STP Fact Sheet.
Of course you are also free to contact us at any time to discuss your personal circumstances and where your business fits with regards to Single Touch Payroll.