QuickBooks single touch payroll software solution powered by Employment Hero is ATO approved and comes with built-in STP compliance.
What is Single Touch Payroll (STP)?
Single Touch Payroll is a way for employers to report wages, PAYG and superannuation to the Australian Taxation Office (ATO)
Instead of waiting until the end of the financial year, payroll information is reported every time staff get paid.
What are the changes
The biggest change brought about by STP Phase 2 is additional reporting requirements of employee and earnings data. This means data regarding employer and employee interactions between the ATO and other government agencies are more streamlined, and admin tasks associated with hiring and terminating employees is reduced.
Disaggregation of Gross Income Amounts
In Phase 1 of STP, Year-to-date gross income amounts were reported to the ATO via pay and update events. Phase 2 extends the use of this data to other government agencies such as the Department of Social Services, Services Australia (Child Support and Centrelink) and the Department of Veterans' Affairs. Because these agencies assess income differently, the disaggregation (separate itemisation) of gross income amounts will provide more accurate and relevant employment income information to them. The following components of gross earnings will be disaggregated:
- Allowances
- Bonuses and commissions
- Directors' fees
- Overtime
- Paid leave
- Salary sacrifice - In Phase 1, salary sacrifice amounts were not required to be reported. In Phase 2, it is a requirement.
Paid Leave
Paid leave is no longer incorporated as part of gross earnings when reporting earnings via STP. Paid leave is now reported using itemised leave type codes.
Additional allowance type codes have been added to meet the new reporting requirements. This allows the ATO to assist the employee when completing their IITR.
Termination Reason
Phase 2 requires the reason for termination to be included in the STP report sent to the ATO and takes away the need for an employment separation certificate to be issued to the employee altogether.
TFN Declarations
TFN declarations are no longer required to be sent to the ATO. The information in the TFN declaration will be sent in your first STP filing, and the ATO assumes that you’ve completed the TFN declaration form and have a copy for your records.
New fields reported under phase two are the Employee commencement date and Employment basis.
Additional Reporting Requirements
With STP2, employers must declare whether an employee is a volunteer, labour-hire, casual, part-time or full-time. If employers employ Australian residents to work overseas, they will need to report details regarding the host country. With STP2, employers must report each component of income rather than the gross sum, itemising; overtime, commissions, salary sacrifice, bonuses, paid leave, and allowances.
Child Support Garnishees/Deductions
STP Phase 2 has introduced the ability to report on child support garnishees and deductions through STP. Reporting through STP will remove the need for employers to provide separate remittance advice to the Child Support Registrar. If you choose to not report through STP then there is no preparation required to be Phase 2 ready in this area, however employers will still need to report directly to the Child Support Registrar on an ongoing basis.
Lump-Sum E Payments
Previously, employers had to supply their staff with lump sum E letters at the end of the financial year. New reporting under STP Phase 2 means this data will be included in the pay event prior to finalising your employee income statements – this means Lump sum E letters are no longer required.
Income Stream Collection
This includes income type, payment type and may also include a country code (for specific income types).
Disaggregation of Gross Income Amounts
In Phase 1 of STP, Year-to-date gross income amounts were reported to the ATO via pay and update events. Phase 2 extends the use of this data to other government agencies such as the Department of Social Services, Services Australia (Child Support and Centrelink) and the Department of Veterans' Affairs. Because these agencies assess income differently, the disaggregation (separate itemisation) of gross income amounts will provide more accurate and relevant employment income information to them. The following components of gross earnings will be disaggregated:
- Allowances
- Bonuses and commissions
- Directors' fees
- Overtime
- Paid leave
- Salary sacrifice - In Phase 1, salary sacrifice amounts were not required to be reported. In Phase 2, it is a requirement.
Paid Leave
Paid leave is no longer incorporated as part of gross earnings when reporting earnings via STP. Paid leave is now reported using itemised leave type codes.
Additional allowance type codes have been added to meet the new reporting requirements. This allows the ATO to assist the employee when completing their IITR.
Termination Reason
Phase 2 requires the reason for termination to be included in the STP report sent to the ATO and takes away the need for an employment separation certificate to be issued to the employee altogether.
TFN Declarations
TFN declarations are no longer required to be sent to the ATO. The information in the TFN declaration will be sent in your first STP filing, and the ATO assumes that you’ve completed the TFN declaration form and have a copy for your records.
New fields reported under phase two are the Employee commencement date and Employment basis.
Additional Reporting Requirements
With STP2, employers must declare whether an employee is a volunteer, labour-hire, casual, part-time or full-time. If employers employ Australian residents to work overseas, they will need to report details regarding the host country. With STP2, employers must report each component of income rather than the gross sum, itemising; overtime, commissions, salary sacrifice, bonuses, paid leave, and allowances.
Child Support Garnishees/Deductions
STP Phase 2 has introduced the ability to report on child support garnishees and deductions through STP. Reporting through STP will remove the need for employers to provide separate remittance advice to the Child Support Registrar. If you choose to not report through STP then there is no preparation required to be Phase 2 ready in this area, however employers will still need to report directly to the Child Support Registrar on an ongoing basis.
Lump-Sum E Payments
Previously, employers had to supply their staff with lump sum E letters at the end of the financial year. New reporting under STP Phase 2 means this data will be included in the pay event prior to finalising your employee income statements – this means Lump sum E letters are no longer required.
Income Stream Collection
This includes income type, payment type and may also include a country code (for specific income types).
What's not changing?
- The way you lodge pay and update events
- The due date for lodging events
- The types of payments that are needed
- Tax and super obligations
- End of financial year finalisation event requirements
How QuickBooks can help with STP compliance?
Discover the benefits of Single Touch Payroll and using QuickBooks Payroll powered by Employment Hero.
Streamline reporting
Automatically send payroll info each pay run
Fast and accurate processing
No more manual data entry
Easier at tax time
Save time and paperwork at the end of the financial year
ATO approved
Send complete and ATO compliant reports with every pay run
Build the right plan for your business
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Unlimited support
Free guided setup
Call sales for further assistance 1800 917 771
How to setup Single Touch Payroll in QuickBooks
Here is a step-by-step guide on how to setup Single Touch Payroll in QuickBooks:
- Step 1: Sign in to your QuickBooks account
- Sept 2: Select Employees and sign up to Employment Hero (our integrated payroll partner)
- Sept 3: Select Payroll settings then Electronic lodgement and STP
- Sept 4: Select Enable Single Touch Payroll
For a more detailed look at how to set up STP, click here.
Hear how QuickBooks is helping our customers with
Single Touch Payroll compliance
Single Touch Payroll compliance
I love how QuickBooks brings efficiency to our payroll. Hours are logged on-site with the app and we receive it instantly.
Ana Saad Co-Founder - J&JJ Landscaping
We use QuickBooks for most of our clients. It's STP compliant and has the tools that the building industry needs.
Maria Cavallaro, Founder - Tradie Troopers
Frequently asked questions about Single Touch Payroll (STP)
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