What is Single Touch Payroll?
Single Touch Payroll (STP) is a new payroll reporting standard, where employers are required to electronically report their payroll information to the Australian Taxation Office (ATO) on or before employees are paid.
What this means for Employees
If your employer is reporting under STP, they are no longer required to issue you with a PAYG Payment Summary. Instead, your wages and tax information will be available to your registered tax agent. Alternatively, you can access the information through MyGov, however you will need to have this linked to the Tax Office. You can check your year to date wages any time through your MyGov account, as this is updated after every pay run. Finally, you are able to call the ATO to obtain your wages information.
What this means for Employers
Once setup, STP will reduce your wages reporting requirements, particularly at year end. Instead of preparing and issuing annual PAYG Payment Summaries, and then lodging these with the ATO, you now just have to finalise the payroll for the year, and your payroll software will report the data to the Tax Office.
You can finalise an employee’s payroll at any time during the year, for example you can report a finalisation event after they cease employment. Any corrections to wages must be made through your payroll system and lodged using STP to ensure that the ATO has the correct data.
Directors and Family wages (closely held)
Wages or salaries paid to yourself or family members are considered to be “closely held” employee payments. There are extended due dates for reporting closely held wages under STP. These are outlined below.
Click the following links for more detailed information, depending on your situation.
- Closely Held Employers
- Micro Employers – 1-4 employees
- Small Employers – 5-19 employees
- Large Employers – 20+ employees
Need help?
For clients using Xero payroll, we can review your payroll setup to ensure it is STP ready for a fixed fee of $440 including GST. This will cover a review and setup of your payroll items to be STP compliant. Please note that for you to process and report your payroll, you will need to register your software with the ATO. This can be done over the phone by a Director or associate of the business (trustee, partner etc).
If you don’t currently have an STP compliant payroll system (for example you are using spreadsheets or wages books), then you will need to implement a compliant system – this will provide a number of benefits:
- Ensure you remain compliant with the Governments payroll requirements
- Keep up to date with changes to tax rates
- Reduce the administration of setting up new employees by completing their tax file number declarations and super choice forms online.
- Reduce the time taken to record transactions with automation and transaction feeds from your bank.
Talk to us now to help you plan and implement your upgrade before you are required to report under STP! Contact us on +61 7 3378 7399 or via email at info@gillmckerrow.com.au.
