To help employers ensure they will be STP ready, we have provided some of the best ATO resources to assist in the transition.
- ATO Single Touch Payroll for small employers fact sheet https://iorder.com.au/publication/Download.aspx?ProdID=75172-05.2019
- ATO Single Touch Payroll – Get ready checklist for employers https://iorder.com.au/publication/Download.aspx?ProdID=75181-04.2019
- ATO fact sheet – The way you get your payment summary is changing https://iorder.com.au/publication/Download.aspx?ProdID=75191-05.2019
Before jumping headfirst into registering STP for your business, it might be a great time to review your current business practices. Below is a short list of business practices you should review before registering for STP.
- Is your current accounting software sufficient for your business (if you have one)?
- What business structure do you currently operate from and if it is the most beneficial moving forward for your business?
- Who is going to attend to the single touch payroll reporting? Yourself, bookkeeper, accountant?
- Is it time to review your employer / employee arrangements? Do you have contracts in place?
- Are you paying your employees correctly? Are they paid a minimum wage rate? Award?
We know we need to register for STP, but what is it?
STP is :
Single Touch Payroll, more commonly known as STP, has been introduced as a new method of reporting tax information to the ATO.
When using a solution that is STP ready, you will have to send your payroll information directly to the ATO. This will provide a few advantages, namely:
- You won’t generally need to give your employees a payment summary of the data you provide and finalise through STP, as your workers are likely to find this on myGov.
- In order to ensure that all the data you’ve provided is complete (so that it can be presented to your employees to aid in the completion of their tax returns), you may have to finalise your Single Touch Payroll information at the end of each financial year.
- You‘ll often be able to carry on paying your workers on your regular pay cycle.
- In most cases, you’ll now be reporting your super information to the correct authorities.
What are the advantages of STP reporting?
While you’re busy running your business, the Single Touch Payroll gathers and provides the tax and super information of your workers and pays them. Almost all Australians will make purchases, bank and more online daily – and the STP helps to balance government reporting against the ever-changing online environment. Its just another data matching technique the ATO are employing.
The benefits and changes it may have on payment summaries include:
- It’s generally simple for any employees who don’t have a myGov account to make one with an email address and a password – and they’ll often be able to see all of their information there.
- When you pay one of your workers and report through STP, myGov will update their year-to-date super and tax data.
- Typically, you’ll no longer need to provide employees with a payment summary (although you may want to note that any data and information that isn’t reported through the STP may still need to be declared on one).
- Any employees that no longer get a payment summary can typically find out the information they need on how to complete their tax return on myGov.
- Payment summary annual reports (PSAR) may not be required.
- Some types of payments may not be necessary for the Single Touch Payroll report, to learn more visit the ato.gov.au website.