Single touch Payroll is coming! For some it is already here!
What is single touch payroll and do we need to worry? Do I need special software to comply? Are there any STP benefits to me? Are there penalties?
Ok, these are all good questions. Lets break these down.
Q1. What is Single Touch Payroll or STP? STP has been introduced by the government to streamline reporting obligations of business. It involves uploading key data from your payroll direct to the ATO via STP enabled payroll software every time you process a pay. For a more detailed overview refer to this news post.
Q2. Do I need to worry about Single Touch Payroll? In general, if you employ over 20 or more employees you should already be complying with the legislation. It came into effect from the 1st July 2018. If you employ 19 employees or less you should in general start complying between the 1st of July 2019 to the 30th of September 2019. However, there are exemptions. For example, smaller employers are entitled to request a deferral. Also, employers that employ between 1 and 4 employees who use a registered tax agent or BAS Agent can report quarterly. Businesses with closely held employees (ie family members etc) will have an extra 12 months to comply.
Q3. Do I need special software? Single Touch Payroll requires upgraded payroll software to facilitate the transfer of the payroll data from your system to the ATO. Most software providers such as Intuit Quickbooks, SageOne Reckon, MYOB and Xero have all upgraded their software to comply. If you employ between 1 to 4 employees you are permitted to use low cost software. This cheap or free STP software is listed in this news post.
Q4. Are there any STP benefits to me? Great question. If you use STP for a complete financial year, then you should not need to issue Payment Summaries to employees or upload End Of Year data files to the ATO. The data should already have been reported to the ATO. Therefore the end of year reporting process has been streamlined.
Q5. Are there penalties? Based on reports to date and comments by the Commissioner, there will not be any penalties for late lodgement or other reporting mistakes for the first year.