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Single Touch Payroll

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From 1 July 2018 Single Touch Payroll will become mandatory for some businesses and optional for other businesses. If you’re not sure what Single Touch Payroll is or whether it applies to your business, keep reading.

What is Single Touch Payroll?

As outlined by the ATO, Single Touch Payroll (STP) aligns your reporting obligations to your payroll process. Put simply, this means that each time you pay your employees, you will report to the ATO. This will include employees’ salaries & wages, allowances, deductions, PAYG withholding & superannuation information.

How does it work?

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What are the key differences with STP?

  • You will pay your employees from your Single Touch Payroll enabled payroll solution (like Key Pay for QBO)

  • Instead of reporting monthly or quarterly, you will report PAYG & Super after a payroll event (i.e. after the payroll has been processed).

  • You will now need to report super contributions as well as PAYG.

Is STP mandatory for my business?

From 1 July, 2018, STP is mandatory for employers with 20 or more employees. If you have less than 20 employees then STP is optional at this stage, however it is expected from 1 July, 2019, it will become compulsory for smaller employers as well.

Important dates for STP

  • 1 April 2018 - count your employees (this includes full-time, part-time, casual, overseas based, seasonal & absent employees). You don't need to count employees who ceased work prior to 1 April 2018, casual employees who didn't work in March 2018, independent contractors, temporary staff provided by a third party labour hire company, and company directors and office holders. If you have 20 or more employees, then you'll have to adopt STP on 1 July 2018. You don't need to send your headcount to the ATO, this count is just to help you find out if you will need to adopt STP on 1 July 2018 or 1 July 2019.

  • 1 July 2018 - those with 20 or more employees will have to adopt STP to stay compliant.

  • 1 July 2019 - it is expected that businesses with fewer than 20 employees will have to adopt STP to stay compliant.

What are the benefits of STP?

  • Streamlined reporting - the biggest benefit of Single Touch Payroll is that employers can meet their ATO reporting obligations at the same time they process their payroll.

  • Pre-fill BAS - the salary & wages (W1) and PAYG withholding labels (W2) will be pre-filled (although you can make corrections & adjustments later). This will save time and reduce error.

  • Streamlined employee commencement processes - TFN Declaration forms & Superannuation Choice forms will be able to be electronically completed by new employees.

  • Employees can access info - salary & wages and PAYG withholding figure will be available to employees through their MyGov account.

How do I adopt a Single Touch Payroll solution for my business?

The ATO has a handy checklist available to help you get ready for the change. Standard business reporting-enabled software or (SBR-enabled software) is essential if STP is going to be compulsory for your business.We can help your business adopt STP-compliant software - get in touch today and we can go through your options.