Single Touch Payroll (STP) is a new regulation introduced by the ATO. All large businesses (more than 20 employees) should now be using STP, or have applied for a later start date. For employers with less than 20 employees, STP reporting will begin on 1 July 2019.
The ATO have given extensions to micro employers (less than 4 employees) and employers that only pay closely held employees, however the sooner you get your payroll systems sorted, the better and easier it will be. The ATO have a list of simple, no cost and low cost solutions for micro employers.
Where once businesses would report payroll information to the ATO once a year, they now need to send a report after every pay date. These reports need to be submitted digitally and use a very specific format.
If you’re a small business that’s getting ready to make the switch, you’ll need to take some time to ensure you are able to submit compliant reports every payday, meaning:
If you’re using online payroll software, it should be able to do this for you. Just make sure it produces ATO compliant reports.
If you use desktop payroll software, you will need to find a service that can upload your payroll reports and convert them to the ATO’s format and submit them on your behalf
If you’re using a spreadsheet, or pen and paper you will need find someone who can convert the information into ATO digital report formatting and submit for you.
No more payment summary annual reports and no more employee payment summaries!
What is does mean is, that if you are already reporting through STP, your end of financial year process will have changed.
If you’re not going to be providing a payment summary to your employees this year, you should inform them. They will be able to access their information reported through STP in their own online account via MyGov.
If you started STP reporting during the 2018-19 financial year, you have until 31 July 2019 to make the finalisation statement within your payroll software. The sooner this has been finalised the sooner it will display as ‘tax ready’ in your employees’ ATO online account and be ready for them to complete their tax return.
If you have any questions about how this affects you as an employer, or as an employee, don’t hesitate to get in touch.