What is STP?

Single Touch Payroll is a new way of reporting tax and super information to the ATO.  It is compulsory for all businesses to use STP from 1^st July 2019.  Large Business Employers (>20 employees) have been reporting via STP since, 1^st July 2018.

When do you report via STP?

Rather than reporting PAYG and Super contributions monthly/quarterly, employers are required to report this each time they run a payroll via the STP.

Why use STP?

STP allows for transparency and accuracy in reporting. When the PAYG and Super are reported at each pay run the ATO is able to pre-fill the BAS returns with the correct amount.  The super contribution will also be accurately identified and reported as well.

Payment of the PAYG and Super will still occur monthly/quarterly as you have done in the past.  It is just the way it is reported that will change.

The benefit to employers is that STP removes the EOFY requirements to produce payment summaries and payment summary annual reports. Employees will also benefit in that they are able to view YTD salary and wage income, PAYG withholding amounts and super guarantee contributions through MyGov.

How do you report via STP?

• If you already have an accounting software, talk to us and we can get your software updated with an additional STP service.
• If you don’t have an accounting software but would like to start using one, talk to us and we will recommend the software that will meet your needs.
• Alternatively, if you only want payroll software to do the mandatory reporting, the ATO is working with software providers to develop a set of no-cost or low-cost solutions which may include mobile apps, simple reporting solutions and portals, that you can choose from.
• Reckon – Reckon Single Touch Payroll – Mobile app – Free – https://www.reckon.com/au/single-touch-payroll-app
• GovReports – Interactive Accounts Manager (IAM – STP) – Online application, Portal, Mobile App – $10 or less per month – com.au/STPExternal Link
• Free Accounting Software Pty Ltd – Free Accounting Software – Desktop – Free – com.au/single_touch_payrollExternal Link
• MYOB Australia Pty Ltd – MYOB Essentials Payroll – Web based – $10 or less per month – com/au/accounting-software/essentials-payrollExternal Link
• Xero Australia Pty Ltd – Xero Payroll – Web based – $10 or less per month – https://www.xero.com/au/stp/1-4/External Link

It is advisable that you start reporting early so that you are ready on the 01^st of July 2019.  If you are unable to do so, apply for a deferral using the online form that is available on the ATO website.

The ATO is taking a slow and steady approach so there will also be no penalties for mistakes, missed or late reports for the first year.

Employers in remote areas with intermittent or no internet access are initially exempted from STP reporting and will be provided with assistance to register with STP as soon as possible.

Who are exempt?

If you are a Micro Business Employer with less than 4 employees, during this transition period, you do not need to report at every pay run.  The ATO has given an option for you to use a registered tax or BAS agent to report your STP quarterly.  This option is available until 30^th June 2021.

There are also flexible reporting options for employers with “closely held payees”, that is, when an employee is directly related to the entity from which they are being paid, e.g.

• family members of a family-owned business;
• directors or shareholders of a company and
• trustees or beneficiaries of a trust.

You do not need to apply for the exemption for reporting closely held employees however, all other employees must be reported through STP.

If you are not exempt and fail to comply with the STP rules, the ATO will be able to raise penalties against you.