Single Touch Payroll (STP) is a new reporting system that automates payroll reporting to the ATO and will largely replace the existing annual Payment Summary reporting requirements.
What is STP ?
This new system means that employers will send payroll information to the ATO directly from your payroll solution for each pay run. It was implemented on the 1st of July 2018 by the ATO and since the start date more than 60,000 businesses have begun reporting via STP, including over 16,000 small businesses.
If a company has more than 20 employees, they must have already implemented STP unless they have been granted an extension by the ATO. If they have less than 19 employees they will have to start reporting before the 1st July 2019. Micro employers with less than four employees will have several special options for STP reporting.
You can find more information about STP on the ATO website https://www.ato.gov.au/business/Single-Touch-Payroll/
Most Infoware Services clients have already implemented STP.
There has been community criticism over how Single Touch Payroll is another burden for business. A common perception is that STP is an unnecessary step that will increase the work employers have to do. However in reality, STP is a simple step to send data to ATO.
The benefits extend to all parties involved with Single Touch Payroll. For employees it is easier to keep track of PAYG tax and super amounts and end of year payment information. It will allow prefill of information for personal tax, reducing errors and ensuring employees are receiving the correct super entitlements. Employees can access all this through their myGov account.
For employers, the ATO will now be collecting the data every pay cycle. This regular process will also decrease the chance of error for employers. End of year payment summaries no longer need to be completed, thanks to STP.
Assistant Commissioner John Shepherd stated : ‘Single Touch Payroll isn’t just about enforcing obligations and creating more data; it’s about making the most of the information an employer captures – and getting that information from them when they’re running their payroll.’
Infoware Services is STP ready and is supporting our clients navigate through this transition.
It is understood there are many government agencies such as Centrelink who are requesting STP data to be passed on from the ATO. This single reporting gateway will add benefits to both community and government when further extended to other government agencies.