As you may have already heard, Single Touch Payroll is here. We recently hosted our annual Get Connected Event and Accounting Consultant, Diane Lucas, presented on the impact of Single Touch Payroll (STP) and what it means for accountants. If you’re still a little unclear about STP and what it means for you and your firm, read on.
What is Single Touch Payroll?
Single Touch Payroll (STP) is a government initiative designed to streamline business reporting obligations. Now when an employer pays their employees under STP the information will be sent directly to the ATO at the time of payroll. It is currently in place for businesses with over 20 employees and was brought into effect as of 1 July, 2018. Small businesses with less than 20 employees will be required to also use Single Touch Payroll as of 1 July, 2019 (subject to legislation).
What are the changes?
There are a number of ways Single Touch Payroll will influence both the way businesses do business and the way advisors relate to their clients.
As a digital reporting requirement, STP removes the need for manual process and requires compulsory reporting to update other government bodies. Employers aren’t required to provide PAYG summaries to employees, but instead, employees can view their tax and super information anytime through the myGov portal.
Employees are also required to grant their Registered Tax Agent access to manage their STP for their business. Tax Agents can use prefilled income tax forms based on YTD figures submitted through STP Pay Events, but require businesses to authorise each Pay Event if prepared by someone other than the authorised business person.
What is reported in STP?
Any information within the payroll process will be reported in Single Touch Payroll. This may include, but is not limited to, OTE, termination payments, parental leave payments, payments of unused annual leave and director payments if subject to PAYG W.
Benefits of Single Touch Payroll
There are a number of benefits of STP for all parties involved. Here are just a few examples:
- Can see their PAYG W liability through the portal
- Can pay their PAY W liability often
- Will not have to provide employees with EOY payment summaries.
- Can lodge pre-filled tax returns through myTax or a Tax Agent
- Use myGov to log into ATO online services and view tax and super information
- See their online EOY payment summary via myGov
- Prefilled income tax returns available through SBR2 and the Practitioner Lodgement Service.
Single Touch Payroll and QuickBooks
QuickBooks Online is ready to go for Single Touch Payroll. You can set up your accountant by going to ATO Settings under Business Settings, and easily opt-in to STP.
Tips for rolling out STP to your clients
First, identify which clients need to be educated on STP and then brief them on the current and upcoming changes and benefits. You can encourage clients to move to STP sooner rather than later and show them how you can help make the change. If they are already QuickBook clients, you can help them set up STP using QBO software and get compliant right away.
To find out more about Single Touch Payroll, download the slides from our recent Get Connected Event here – Single Touch Payroll Presentation.