Single touch payroll basics
Single touch payroll is a way to streamline your payroll reporting and changes how businesses report the payroll information of their employees. For employers with more than 20 employers, single touch payroll started on 1 July 2018. Under the system, businesses report payments, such as salaries and wages, pay as you go (PAYG) withholding and superannuation information to the ATO when they pay their employees.
STP can be done through existing software (accounting and payroll) that has been updated to include Single Touch Payroll reporting. To meet STP requirements, payroll software providers have been updating their products. If you are not sure if your accounting/payroll software has been updated to provide STP, contact the provider.
When do you need to get ready for single touch payroll?
Businesses with more than 20 employees needed to report using Single Touch Payroll beginning on 1 July 2018. For employers with 19 employers or less, Single Touch Payroll will come into effect from 1 July 2019.
What does Single Touch Payroll mean for small businesses?
When reporting using Single Touch Payroll, employees send payroll and super information each payday to the ATO from your payroll/accounting software. Payroll cycles do not need to change and can be weekly, fortnightly or monthly as before. The payment due date for PAYG withholding and superannuation contributions do not change. Reporting to the ATO through Single Touch Payroll makes it possible for employees to view their tax and super information for the year to date.
Under the new system, employees will be able to view their year-to-date payment information online through online ATO services at my.gov.au. As an employer, you will no longer need to give the tax office a payment summary annual report (PSAR) at the end of the financial year.
How to get STP ready
If you have a business with fewer than 20 employees, you will be required to implement STP by 1 July 2019. If you are not sure whether your software up to date for STP reporting, contact the provider. If you are not using accounting or payroll solution software, you can find a cost-effective solution to get ready. The tax office has provided a list of no-cost and low-cost software solutions that businesses can use to be prepared.
If you use the services of a payroll or tax agent, they can report to the ATO for you through Single Touch Payroll.