Single Touch Payroll What is it and does it apply to me?
Single Touch Payroll (STP) is an ATO compliance regulation that requires employers to send employee payroll information to the ATO at the same time as their standard pay run.
Entities with more than 20 employees started reporting their payroll to ATO on a pay cycle by pay cycle basis started reporting 1st July 2018 .
1st July 2019 Businesses with less than 20 employees started reporting.
Sole Traders and Trusts who are required to report and pay their ATO contributions are required to report from 1 July 2020 .
You will have the option to report the information about your closely held payees (also known as Arms’ Length Employees) on a quarterly basis. Arms’ Length Employees are those transactions or relationships that are typically non-employee family members.
Is STP compulsory?
Single Touch Payroll is already compulsory for businesses with employees. Those businesses already report their employees’ payroll and super information to the ATO each time they pay their employees.
What is STP Australia?
A regulation that changes when and how small businesses report payroll activity to the Australian Tax Office (ATO). Reporting after each pay day cycle, instead of the traditional yearly PAYG submission.
What are the benefits of STP?
Government is trying to actively align reporting obligations to payroll and avoiding the need for action at a later date.
Click here to for more information and resources on the ATO website.
How do I start Reporting?
You have missed the compulsory starting date of 1st July 2019, but you can still setup and report.
A transitional deferral should be used if you need more time to get ready for STP reporting and deferrals will be considered if you:
need more time to start STP reporting
transitioning to a new STP-enabled solution
are using customised payroll software and need time to configure and test it
have complex payroll arrangements and need additional time to transition
entered administration or liquidation
impacted by a natural disaster
affected by other circumstances out of your control.
Third party reporting through a
registered tax or BAS agent
payroll service provider.
It is your obligation to make sure the third party will be reporting for you through STP-enabled software. Software can be as little as $10 per month some even free.
If you use a registered tax or BAS agent, talk to them about your options. They may be able to report through STP for you, or work with you to outsource your payroll to a payroll service provider.
Payroll service providers who are providing a STP reporting service must be registered as a tax or BAS agent and you can check their registration details with the Tax Practitioners Board