Single Touch Payroll (STP) is now mandatory for all businesses in
Previously, only businesses who hire over 20 staff were obligated to adhere to new reporting regulations. From 1 July 2019, employers with 20 or less staff need to adhere to the STP regime.
What is Single Touch Payroll?
Single touch payroll essentially changes the way employers report their employee’s tax and superannuation information to the Australian Tax Office (ATO). It encourages frequent salary reporting, including wages, PAYG withholdings, and superannuation every time employees are paid.
While using payroll or accounting software that offers STP, employers send their employees’ tax and superannuation information to the ATO each time employers run their payroll and pay their employees.
The relevant information can either be sent directly to the ATO through your accounting and payroll software or through a third party, like a sending service provider.
What do I need to change in my business?
For some businesses, the only change they’ll need to make is reporting their information to the ATO more frequently instead of once at the end of the financial year. You now need to send information to the ATO after every pay run.
If you use payroll or accounting software at the moment that uses STP, you can start reporting at any time.
Digital connectivity is becoming more and more essential in running a business in Australia. Adhering to STP laws will be difficult without adopting payroll or accounting software that offers STP.
What do I do from here?
Talk to your accounting software provider and your accountant to find out what you need to do to update your internal processes and your software to start reporting under STP.
Multiple STP reporting options will be available by 1 July 2019 to help smaller businesses and the ATO have stated they will not force employers to purchase payroll software who don’t currently use payroll and accounting software.