What is Single Touch Payroll?

WHAT IS SINGLE TOUCH PAYROLL?

Single Touch Payroll (STP) is a regulation that changed when and how businesses report payroll activity to the Australian Tax Office (ATO). From 1 July 2019 it is compulsory for all employers to report through STP.

Businesses used to report payroll activity to the ATO once a year. Now, they need to send a report after each pay day. And those reports must be submitted digitally, using a specific format. The information is sent to the ATO either directly from software, or through a third-party service provider.

If you are using a solution that offers STP reporting, such as payroll or accounting software, you file your employees’ tax and super information to the ATO using the software each time you run your payroll and pay your employees.

THE GOOD NEWS IS;  NO MORE PAYMENT SUMMARY ANNUAL REPORTS NO MORE EMPLOYEE PAYMENT SUMMARIES, EITHER!

Because you are updating the ATO on a pay-by-pay basis, you don’t need to prepare Payment summaries or a payment summary annual report anymore. You just complete an STP finalisation at the end of the financial year to let the ATO know when you’ve made your last pay run for your employees.

​The ATO uses single touch payroll reports as the sole record of salary/wages paid, taxes collected, and superannuation contributed. Your employees are able to see the information that was previously on their payment summary/group certificate by logging on to myGov.

YOU NEED TO REPORT PAYROLL ONLINE.

​There are no more paper forms for reporting your payroll activity to the ATO. You need to submit the information online, using a specific format known as Standard Business Reporting (SBR).

This is done through your payroll software or third-party service provider. 

HOW STP WORKS.

You run your payroll, pay your employees and give them a payslip.

Your STP-enabled payroll software or service provider sends the ATO a report which includes the information they need from you, such as salaries and wages, pay as you go (PAYG) withholding and super information.

You report super liability information through STP. Super funds also report to the ATO. They let them know when you make the payment to your employees' chosen or default fund.

ATO systems match the STP information to employer and employee records.

Your employees are able to see their year-to-date tax and super information in ATO online services, which can only be accessed through myGov. Their data is updated every time you report (each pay day for most employers).

If you make mistakes in your STP report, you can correct it in your following report. The ATO won't penalise you for making mistakes you correct.

At the end of the financial year, you need to finalise your STP data. This is a declaration to the Commissioner to state you have completed your reporting for the financial year.

You no longer have to give your employees a payment summary for the information you've reported and finalised through STP. Once you finalise your data, your employees or their accountant will be able to lodge their income tax return using the STP information available on the myGov account.

​STP is available on all Xero plans that include payroll.

WHAT IF I NEED HELP?

CALL JESS AT ANYTIME ASSIST ON 0431 604 609

Jess can help you to set up Single Touch Payroll for your business. She can assist you with creating an easy procedure for each pay run so that Single Touch Payroll becomes an easy task. If you would prefer Jess will complete your payroll for you each pay period.