Single Touch Payroll
Single Touch Payroll (STP) is a new way to streamline business reporting obligations. As an employer, you will be required to report salary or wages, pay as you go (PAYG) withholding and super information to the ATO from your payroll solution, at the same time you pay your employees.
Rather than paying your wage tax liability to the ATO with your activity statement (quarterly or monthly), you will be required to pay the wage tax liability to the ATO at the same time as you pay your employees.
How does STP affect businesses with 20 or more employees?
For businesses with 20 or more employees on April 1 2018, you will need to report through a payroll solution that enables Single Touch Payroll from July 1 2018. If you don’t use a payroll solution, you will need to use one by July 1 2018 that enables Single Touch Payroll reporting.
How does STP affect businesses with 19 employees or less?
For businesses with less than 20 employees, your reporting obligations remain unchanged at this stage – you are not required to report through Single Touch Payroll, however can report through Single Touch Payroll to take advantage of any benefits that it may offer. The Australian Government has announced that STP will expanded to include businesses with 19 employees or less from 1st July 2019, subject to legislation being passed in parliament.
What does it mean to employers?
- Simplified business reporting by using the existing payroll processes to meet your PAYG withholding reporting obligation in real time
- Removal of the requirement to produce payment summaries to individuals or a payment summary annual report to the ATO
- Reduction of on-boarding paperwork as tax file number declarations and super Standard Choice forms can be completed online via myGov
- Communication of the new digital approach to payment summaries and myGov to all employees
Will there be penalties?
No penalties will be imposed for the first 12 months for late submission of STP reports, and there will be a grace period for incorrect data on STP reports.
Payroll software and service providers are currently working with the Tax Office to ensure they will be compliant by the above start dates. You should receive communication from them regarding this.