What is Single Touch Payroll, who needs to adopt it, and why is it being introduced?
Great question! Single Touch Payroll or STP is already in place for employers with 20 or more employees and is being phased in from the 1st of July 2019 for employers that employ below 20 employees. By phased in, I mean that employers with 19 or less employees can introduce STP from the 1st of July to the 30th of September 2019.
What is STP? Single Touch Payroll is a new way of reporting payroll information to the ATO, which includes your employees salary and wage information, PAYG tax and superannuation obligations, each time you process a payroll. There are a number of ways this can be achieved. You can adopt an end to end solution by using STP compliant payroll software that can electronically transmit the data to the ATO from your payroll software or you can use a service provider that provides that service on your behalf – either from your software, or reported from outside your software. If you are unsure whether your payroll software is STP compliant , contact the supplier of your software for advice.
If you employ 1 to 4 employees you have other options, especially if you do not currently use any software to process your pays. There are a number of free or low cost options available. Refer to this post detailing free and low cost STP software options.
What are the benefits of STP? Employees will be able to log into the ATO through their MyGov account and check their YTD tax and superannuation balances when ever they want. the benefits for employers include the removal of the requirement to give your employees Payment Summaries, as this data will already be reported to the ATO through the periodic STP reporting. The Payment Summary Annual Report (PSAR) will also no longer be required to be sent to the ATO. Also, starting fro 2020 the BAS reporting will be streamlined with W1 and W2 entries on the BAS return being prefilled from the STP data you have already submitted.