Small employers (those with 19 or less employees) need to get ready for Single Touch Payroll (STP) ahead of the 30 September start date.
STP became mandatory for small employers from 1 July this year, however, the ATO granted an extension to businesses that needed more time to get ready until 30 September.
What is STP?
STP is a new way of reporting tax and super information to the ATO.
Using payroll software or another solution that is STP ready, you’ll send your employees’ salary and wage information, pay as you go (PAYG) withholding and super information to the ATO each time you pay your employees. This means:
- your pay cycle does not need to change (you can continue paying your employees weekly, fortnightly or monthly)
- you will now report super information to the ATO
- once you start STP reporting, you need to continue reporting each pay cycle
- you no longer need to give your employees a payment summary or income statement for the information you report and finalise through STP – this will be available to your employees on their myGov
- you will need to finalise your STP information at the end of the financial year – that way the ATO knows all the data you have reported is complete and they can provide this to your employees to complete their tax return.
Changes to payment summaries or income statements
You no longer need to give your employees a payment summary or income statement for the information you report and finalise through STP. Any information not reported through STP must still be provided on a payment summary or income statement.
If your business is STP compliant, there is also no longer a need to provide the ATO with a payment summary annual report (PSAR). This information will come through the periodic STP reporting your business completes and is compiled together by the ATO.
Exemptions and concessions
Certain exemptions and concessions are available for businesses with internet connectivity issues and micro employers (with 1 to 4 employees). If you fall within the definition of these entity types and have issues reporting by the 30 September date, please contact Abbotts and we can assist you in applying for a concession or exemption.
Using STP-enabled software to complete STP reporting
Ensure your current payroll or accounting software is STP compliant. If you are unsure, please give us a call and we can assist you.
If you are currently managing your business financials using an offline accounting software (eg. MYOB AccountRight v19), you will not be able to complete STP reporting. To update your accounting software to an STP-enabled version that will adequately suit your businesses needs, please speak to one of our professional staff at Abbotts on 08 9321 2642.
This article includes information sourced from the Australian Tax Office website – © Commonwealth of Australia