WHAT IS SINGLE TOUCH PAYROLL?
How will it affect my business?
Single Touch Payroll (STP) is a new way of reporting tax and super information to the ATO.
From 1st July 2019, STP will apply to all employers.
If you are using a solution that offers STP reporting, such as payroll or accounting software, you will send your employees’ tax and super information to the ATO each time you run your payroll and pay your employees.
Single Touch Payroll has been a requirement for businesses with 20 or more staff from mid-2018. The new legislation now requires every employer – even those with only one staff member – to use the online reporting system from July this year.
Employees include full-time, part-time, casual, overseas, absent, and seasonal staff employed by your business. It does not include independent contractors, staff provided through labour hire, or company directors or officeholders.
What you need to know about Single Touch Payroll
Traditionally, payroll is reported through your Business Activity Statement (BAS) at the end of each quarter.
The Single Touch Payroll change means that this information is reported in real time; that is, every time you do a pay cycle. Your pay cycle does not need to change – you can still pay employees weekly, fortnightly or monthly as you choose.
The Single Touch Payroll system automatically reports:
- Salaries and wages
- Pay As You Go (PAYG) withholding
- Superannuation information
As reporting is digital and in real time, you may not need to provide a payment summary to employees at the end of the financial year (for certain payments). The ATO plans to pre-populate this information for employees which can be accessed through their myGov account. Employees should also be able to view year-to-date tax and superannuation information in myGov.
In the future, the ATO also plans to digitise employee forms including Tax file number declaration, Superannuation standard choice form, and Withholding declaration. This should make the process of onboarding new employees faster and simpler for all employers.
First published on RSM website 26 March 2019
DISCLAIMER: This article is general ONLY in nature and is not advice