With the mandatory Single Touch Payroll (STP) deadline fast approaching for Australian employers, it’s wise to make sure that you’re completely across the changes that will be happening and what they mean for employers and employees alike.
We’ve put together a comprehensive guide to the new STP obligations with some handy checklists and resources you can use to ensure your compliance.
- Small employers (5-19 staff) to be STP compliant by 1 July 2019
- Micro employers (1-4 staff) will have alternate ways to report
- All employers with 20+ employees should already be reporting via STP, legislated for 1 July 2018
STP compliance deadline
The deadline for Single Touch Payroll compliance for small employers with less than 19 staff is 1 July 2019. For employers with 20 or more staff, you should already be using STP reporting software as of 1 July 2018.
If you’re a micro employer with 1 to 4 employees, the ATO has outlined you will have alternate ways to report. The ATO have provided a list of no-cost or low-cost solutions for micro employers who are needing STP ready solutions. Micro employers also have quarterly reporting options, rather than every time payroll is run, until 30 June 2021 as part of the transitional agreements.
STP has changed how the ATO receives employee payment information
With STP, each time an employee is paid, their salary and wage information, pay as you go (PAYG) withholding and super information will be sent to the ATO.
Whether employees are paid weekly, fortnightly or monthly, each time an employee is paid will also update the year-to-date total information the ATO holds. This action has been coined a pay event. When the pay event triggers an update to the year-to-date totals, information then becomes available for employees to view online.
What this means for employees
Employees will no longer receive payment summary information; instead the year-to-date information will be available to view any time via myGov account. In order to make this information available, employees must firstly have a myGov account, and secondly link it to the ATO.
After the two accounts are linked, each time an employee is paid they will be able to see year-to-date totals and super information under the income statement section of their myGov account. As a result, employees will no longer receive payment summaries.
Streamlining the tax lodging process
The good news is that STP is making lodging tax easier for everyone. Ready to complete tax returns will be made available at tax time once the statement has been marked at ‘tax ready’. All of the necessary income information will then be completely pre-filled, making lodging tax returns easier than ever before.
Payment summaries no longer need to be created and issued to all staff, as STP updates the ATO with this information each pay event. At tax time, the ATO will send a notification to each employee’s myGov inbox as soon as their income statement has been marked as ‘tax ready’.
For employers to be exempt from sending payment summaries to employees, as well as an annual report to the ATO, the submission of a finalisation declaration via your payroll software is necessary.
How to make sure you’re compliant
For employees, it’s the responsibility of your employer to make sure their payroll software is up-to-date and has STP capabilities.
For employers, making sure everything is up-to-date is crucial. The ATO has been urging businesses to start using STP early well before the deadline date to make sure everything is working smoothly.
Attaché has provided some fact sheet resources to make sure employees and employers alike are across the deadlines and changes, which you can find here:
If you need help in making sure that your business is STP compliant or are looking for a powerful payroll solution, get in contact with our knowledgeable Business Software Consultants.