Get ready for Single Touch Payroll!
Single Touch Payroll (STP) reporting is available through payroll, accounting and business management software. Most software providers are offering STP-enabled products for Employers.
What is it?
STP automatically sends tax and super information from your payroll or accounting software to the ATO as you run your payroll. Once STP is set up, all you need to do is run your payroll and pay your employees as normal, the ATO systems will then match the STP information to your employer and employee records.
Your employees will be able to access their year-to-date tax and super information through their myGov account. Their data is updated each time you report (each pay day for most employers).
What do I need to do?
The first step is to determine how you will report through STP. This may depend on the size of your business, and if you currently use payroll or accounting software.
- If you don't use software, talk to your Tax or BAS Agent for advice on choosing the right product to suit your business needs.
- Ask a third party, such as a registered Tax or BAS Agent, or a payroll service provider, to report through STP for you.
- The ATO is working with software providers to develop low and no-cost reporting solutions including simple payroll solutions, portals and mobile apps. A list of providers can be found on their website ato.gov.au/stpsolutions.
- You will need to Opt in to Single Touch Payroll in your accounting software, this will be in the payroll section.
- The authorised person for the business will need to contact the ATO to provide proof of ownership, Company Name, ABN, Software provider and software ID.
- Once this is set up there are a couple of extra clicks and a tick you need to do when doing each pay run.
- You, or your nominated person, needs be added as a contact for pay-as-you-go withholding. This contact is listed in the STP pay events and is someone who understands your payroll amounts and how it is calculated.
- Talk to your staff about STP to let them know about the new reporting arrangement.
- At the end of the financial year, you'll need to finalise your STP data. This is a declaration to the Commissioner to state you have completed your reporting for the financial year.
What do I need to know?
- There are no penalties for mistakes, missed or late reports for the first year.
- The ATO will provide exemptions from STP reporting for employers experiencing hardship, or in areas with intermittent or no internet connection.
- You will no longer have to give your employees a payment summary for the information you've reported and finalised through STP.
- Once you have finalised your data, your employees or their registered agent will be able to lodge their income tax return using the STP information available from MyGov or the Tax Agent Portal.
- You will no longer need to provide the ATO with a payment summary annual report (PSAR) at the end of the financial year for the payments you report through STP.
The ATO have developed detailed Single Touch Payroll employer reporting guidelines to help you understand all the requirements of STP. This includes what you need to report, how to make corrections and finalising your STP data.