For small businesses with 19 or fewer employees, Single Touch Payroll (or STP) became a requirement from 1 July 2019, with a three-month transition period granted to get STP up and running. Larger businesses with 20 or more employees were required to start from 1 July 2018.
The three-month transition period for small businesses is coming to an end on 30 September 2019. Are you ready to start lodging?
What is STP?
Single Touch Payroll is an electronic reporting system to submit payroll information directly to the ATO each time employees are paid through compliant STP software. The STP process does not physically pay employees, just records and reports to the Tax Office, so is in addition to your normal payroll process.
The reporting is expected to assist the ATO in monitoring compliance with tax and superannuation obligations.
A benefit of STP reporting is that PAYG summaries will become a thing of the past. Instead, an STP finalisation report will be lodged to close off the year. Information reported through STP is available to employees in real-time via a myGov account, or by contacting the Tax Office.
How to get ready
If you haven’t already started lodging STP reports, it is really important to get ready ASAP. It is relatively simple and painless to get set up with the right tools.
If you have payroll software check whether it is STP compliance. Either talk to your accountant or contact the software company to find out. You may just need to ‘switch on’ the STP function.
If you don’t have payroll software already, now is the time to start having a look. Xero, MYOB AccountRight and MYOB Essentials provide payroll options as part of their fully functioned accounting packages. There are also stand-alone payroll options which include Xero and MYOB’s low-cost options for up to 4 employees, and other applications such as Key Pay.
Talking to your accountant about the options available might make the decision easier. Your accountant can demonstrate what options are available and then help you set up software and get started with payroll.
Once payroll software is set up, connecting to the Tax Office is as simple as a phone call to the Tax Office. The phone call generally doesn’t take as long as you would expect being the Tax Office which is a nice surprise!
After connecting, lodgement is as simple as preparing a pay run, posting it in the software then filing with the Tax Office. This is usually achieved through a few clicks – it is not a scary or difficult process at all!
Green Taylor Partners are here to help!
Our website has a dedicated STP page which has further information and links to resources to assist you in making a decision and getting set up. Visit https://greentaylor.com.au/resources/single-touch-payroll/ to get started.
If you are having trouble working out what solution will fit you best, or need some help setting up your software please feel free to contact your accountant at GTP. Our team is happy to help you through the process from choosing payroll software, set up and training and being your trusted back up support.