14 March 2019
by David Prichard
- Related topics
As you may be aware, the Australian Tax Office (ATO) implemented a Single Touch Payroll (STP) system on 1 July 2018 for all employers who have 20 or more employees as of 1 April 2018. This has now been extended, from 1 July 2019, for employers with 19 or fewer employees.
STP is the next step in streamlining your payroll reporting. It will change the way you report your employees’ payroll information to the ATO.
Payments such as salaries and wages, pay as you go (PAYG) withholding and super information will be required to be reported to the ATO when you pay your employees. This means that the payroll information will be reported immediately to the ATO rather than on a monthly or quarterly basis. Payment due dates for PAYG withholding and super contributions will not change, however you can choose to pay earlier.
STP can be reported through 2 methods:
1. Accounting/ Payroll software: Some accounting and payroll software have an STP function which should facilitate lodgement of the information to the Australian Taxation Office each pay run (see below).
2. Third Party Lodgement: If you do not have an accounting or payroll system that offers STP, a registered agent can report the STP on your behalf.
There are currently six products that have STP functionality which are priced at $10 or less per month. The major software providers are yet to release their versions of STP enabled software but expect to have them on the market before 30 September 2019. The ATO have provided a grace period until 30 September 2019 to allow STP reporting given the short implementation time.
The continuous data flow to the ATO is designed to reduce year end compliance for employers and employees whose affairs are straight forward (eg those that do not have reportable fringe benefits or other payments that are not processed through the payroll system). Employee’s will still be able to access the relevant information through their myGov account or their Tax Agents via the Tax Agent Portal.
If you require more time to transition to STP we can apply for a later start date with the ATO depending on your circumstances. The ATO are aware of the short lead time to comply and are therefore amenable to a transition period, however, this should be discussed and agreed up front.
Should you require further information to the above or require any assistance with the implementation of STP or other accounting systems, please do not hesitate to contact your engagement on 02 9283 1666.