Are you ready for Single Touch Payroll?
New obligations for any-sized business from 1 July
The government’s Single Touch Payroll (STP) reporting scheme has now been extended to include all small employers (those with fewer than 20 employees) from 1 July 2019. Larger employers should already be reporting through STP or have applied for a later start date.
STP reporting is one of several measures introduced by the government to safeguard and modernise the Superannuation Guarantee (SG) system, and there will be some action you need to take to meet your new obligations.
STP aims to streamline payroll functions with your business tax and super reporting obligations to the Australian Taxation Office (ATO). This means you will report payments such as salaries and wages, Pay As You Go (PAYG) withholding tax, and superannuation information to the ATO, at the time you pay your employees.
What’s happening from 1 July
Small employers with 19 or less employees will need to report through STP from 1 July 2019. However, this is a gradual transition and the ATO is providing flexible options, especially for those employers who don’t currently use payroll software.
There’ll be even more options if you’re an employer with four or less employees, including no-cost and low-cost STP solutions.
- Already using payroll or accounting software
If you’re using payroll or accounting software that offers STP reporting, you can update your product and start reporting any time from 1 July – 30 September 2019. If you haven’t already done so, you should contact your payroll solution provider to confirm whether your product is able to meet your STP obligations.
Some providers have asked for more time to update their products and may have a deferred start date – check with your provider for more details.
There are also a few steps you need to take to connect your software to the ATO – again, check with your provider or review the ATO’s checklist at ato.gov.au/stpchecklist
- Choosing payroll software
If you don’t currently use payroll or accounting software, or your current software provider is not going to offer an STP-enabled product (e.g. we’re aware some providers aren’t updating older products), you may need to choose a new payroll or accounting software provider who can offer an STP compliant solution. The ATO provides a list of solution providers on their website, or you could start by asking your registered tax or BAS agent for suggestions.
- Using a third party
Another option is to engage a third party, such as a registered agent or payroll service provider, to complete the STP reporting on your behalf.
If you use a registered tax or BAS agent, talk to them about your options. They may be able to report through STP for you, or work with you to outsource your payroll to a payroll service provider.
Employing 4 or less people?
If you have four or less employees and don’t currently use payroll software, there will be other ways to report STP information.
- The ATO has asked software developers to build no-cost and low-cost STP solutions for micro employers, including simple payroll software, mobile phone apps and portals. The ATO has published a list of companies offering these solutions at ato.gov.au/stpsolutions
- You will also have the option for your registered tax or BAS agent to report your STP information quarterly, rather than each time you run payroll. This option will be available until 30 June 2021.
If you won’t be ready in time
If you won’t be ready to start reporting by 30 September 2019, use the ATO’s online form to apply for a deferred start date or contact your Tax Agent/Accountant.
You can also ask the ATO for an exemption if you meet certain criteria. For example, if you live in an area with intermittent or no internet connection, you can visit the ATO website at ato.gov.au/stpdeferrals to apply for an exemption.
Where to go for help
If you have any questions or concerns about your STP current contribution processes or obligations, firstly visit the ATO website at ato.gov.au/stp. You can also contact your payroll software provider or tax/accounting agent.