As lockdown restrictions begin to ease Australia-wide, a new normal is emerging for businesses and…
Single Touch Payroll
Single Touch Payroll (STP), is an Australian Government initiative to reduce employers’ reporting burdens to government agencies.
With STP, you report employees’ payroll information to us each time you pay them through STP-enabled software. Payroll information includes:
- salaries and wages
- pay as you go (PAYG) withholding
STP started on 1 July 2018 for employers with 20 or more employees and 1 July 2019 for employers with 19 or fewer employees and is a mandatory obligation.
The ATO have provided several concessions depending on business, industry, or employer types. Most of these end on 1 July 2021. If you have a current concession you will need to be reporting each pay day through STP by this date.
If you haven’t started reporting through STP, you need to start reporting as soon as possible as penalties may apply.
- Start reporting now
- Concessional reporting options for eligible employers who have exceptional circumstances.
Expanding data collected from STP
In the 2019–20 Budget External Link it was announced that we would expand the data collected through STP.
This expansion of STP (also known as STP Phase 2) reduces the reporting burden for employers who need to report information about their employees to multiple government agencies. It also supports the administration of the social security system.
Employers will report the additional information through STP on or before each pay day.
The mandatory start date for STP Phase 2 reporting will be 1 January 2022.
There is nothing you need to do right now. The ATO are working closely with digital service providers who will update your STP-enabled software for you.
More information about applying for additional time, if required, to transition to STP Phase 2 will be provided soon.
Key benefits and features of STP Phase 2 include:
- reducing the duplication of information employers provide to Government which will also reduce unnecessary interactions including
- incorporating the reason for an employee ceasing employment to reduce the need for separation certificates
- reporting child support garnishee and deduction amounts voluntarily through STP instead of through the separate manual remittance process
- removing the need to send tax file number and withholding declaration information to the ATO – this will now be captured in the employment conditions section of the STP report
- better defining the components that make up gross income that will
- make it easier for employers to understand their obligations
- help employees understand their earnings and help them with their interactions with Services Australia
- ensure consistency of reporting across the various income types.
- reporting employee payments by income type (or income streams) including
- salary and wages
- foreign employment income
- closely held payees
- working holiday maker
Please contact our office on (03) 9848 5933 if you require assistance.