Single Touch Payroll (STP) changes the way employers report payroll information to the Australian Taxation Office (ATO), and it is mandatory from 1 July 2018 for employers with 20 or more employees.
So … you might be wondering: ‘What is Single Touch Payroll?’; ‘How do I get ready?’. And they are great questions!
WHAT IS STP?
STP requires that payments to employees such as salaries & wages, allowances, deductions, pay as you go withholding (PAYGW) and superannuation be reported to the ATO each time you pay your employees.
This information will be reported using STP-enabled payroll software. If you use STP, you may not need to provide employees with a payment summary at the end of the financial year, as the ATO will make that information available to employees through myGov.
At this stage, STP will still be optional for employers with less than 20 employees. However, legislation is currently before parliament that would make STP mandatory for all employers from 1 July 2019.
If you’re not currently using an STP-compliant payroll system, such as Xero Payroll, now is the time to get set up. These systems also have great superannuation automation functions – which can be a serious time saver!
ABOUT THE STP HEAD-COUNT
To check if STP is mandatory for you, you need to confirm your employee head-count on 1 April 2018. It’s okay if you missed the count on 1 April; just check back and count the employees who were on your payroll on that date.
- The headcount is a self-assessment to check your STP reporting requirements. You don’t need to send the information to the ATO, but you should keep a record.
- If you are part of a company group, you must include the total number of employees employed by the group.
- Count each individual employee, not the full-time equivalent.
- full-time employees
- part-time employees
- casual employees and seasonal workers* who were on your payroll on 1 April and worked any time during March
- employees based overseas
- any employee absent or on leave (paid or unpaid)
- Don’t include:
- any employees who stopped work before 1 April
- casual employees who did not work in March
- company directors, office holders, and religious practitioners*
- staff provided by a third-party labour hire organisation
- independent contractors
HOW TO GET READY FOR STP REPORTING
STP-enabled payroll software
Talk to your software provider to make sure they offer STP reporting. Some providers have asked the ATO for a deferred start date while they make sure their software is STP-enabled.
- If you don’t have a STP-enabled software provider, you need to choose one and start STP reporting from 1 July 2018. You can also ask us, as a registered agent and payroll service provider, to report on your behalf.
- If you will not be ready to start reporting from 1 July, you need to apply to the ATO for a deferred start date. Speak to one of our advisers if you would like help.
Payroll details and business processes
This is a great time to review your other payroll processes as well, including:
- PAYG withholding and ensuring that the most up-to-date withholding rates are being used.
- Superannuation entitlements are being calculated correctly and remitted on time.
- Compliance with the relevant award requirements.
If you would like help getting ready for STP, reviewing your payroll processes, or if you would like to see how we can manage payroll for you, speak to one of our business advisers today. Call us state-wide on 03 6424 1451 or send an enquiry now.
* See further details from the ATO Get-ready-for-Single-Touch-Payroll regarding counting seasonal workers, company directors, office holders, and religious practitioners.