Single Touch Payroll has been on the radar of small business owners for some time now. While it was first mentioned back in 2014, it wasn’t until last year, that the Australian Taxation Office (ATO) released more information about Single Touch Payroll and the specific requirements involved. Single Touch Payroll was officially launched as of 1 July 2018. Let’s take a closer look.
What does Single Touch Payroll mean?
Essentially, Single Touch Payroll (STP) means employers are now required to streamline their payroll reporting. Using payroll software, employers have to report their employees’ tax and super information to the ATO each time there is a ‘payroll event’ – instead of only monthly or quarterly.
This means every time you do a pay run in order to pay your employees, you need to send the ATO your STP data through your payroll software. It also means you will no longer be required to provide payment summaries to your employees for the payments you have already reported on using STP.
When do I need to be ready?
Employers with 20 or more employees are required to report using Single Touch Payroll now. This officially came into effect on 1 July 2018. It’s important to note that the ATO includes full-time, part-time and casual employees as part of your headcount. Single Touch Payroll will be mandatory for employers who have 19 or less employees from 1 July 2019.
What do I need to do?
The first step in getting ready for STP is getting up-to-date accounting software or ensuring your existing payroll supplier is compliant. Thankfully, QuickBooks Online integrated Payroll, powered by KeyPay is already STP ready.
You can find out more about the specific process to set up STP here. Essentially, once you have enabled electronic lodgement and STP within the platform, lodging a pay event is quite simple. You can also ask your registered tax or BAS agent to report your STP for you.
What are the benefits?
It’s important to remember that STP is not a choice, but required by the ATO. Even though you may be forced to oblige, there are some benefits to Single Touch Payroll for employers.
- It will help to streamline the reporting process
- With the use of payroll software and pre-fill options, it will minimise errors
- It will eventually eliminate the need for payment summaries
- It will improve access to new employee information
For more information about small business finances, check out these resources.