The ATO has allowed clients to authorise their registered agent to act on their behalf for Single Touch Payroll (STP).
On 1 July 2018, the Australian Government introduced STP for employers with 20 or more employees. The new scheme requires employers to report payment activities each time employees are paid. The STP engagement authority allows employers to provide the Commissioner of Taxation with the relevant form once a year instead of at every pay event by using a registered agent.
STP engagement authority
A registered agent that reports through STP for an employer can get written authorisation to make this declaration through an annual agreement. This authorisation allows the registered agent to make the relevant declaration to the Commissioner when they lodge an STP at each pay event. Both parties should have a copy for their records although there is no need to provide a copy to the ATO. The agreement should include the following terms:
- An outline of the responsibilities of both parties
- Agreed terms of the employer’s collation of payroll
- Their process for calculating and paying their employees
- Taxation and superannuation obligations
To be eligible for the STP engagement authority the employer must not:
- Have any overdue activity statement lodgements
- Have any outstanding debts, unless they are covered by a payment arrangement or subject to review
- Currently be or have been the subject of the ATO compliance activity for PAYG withholding in the last two years
The STP engagement authority does not apply to other approved forms or the finalisation declaration. A registered agent must still get a signed declaration in writing from an employer before making the finalisation declaration on behalf of the employer at the end of the financial year.