Single Touch Payroll (STP) was officially launched on July 1 2018, making it a requirement for employers of 20+ employees to submit employee payroll information to the Australian Tax Office (ATO) each pay cycle. Of course, this didn’t mean much for small-business owners and their accountants – until now. On February 11 2019 legislation passed making STP a requirement for all Australian businesses completing pay-runs.
What exactly is Single Touch Payroll?
STP is a requirement of employers 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 pay event. This is instead of submitting payroll information on a monthly or quarterly basis. STP also means employers will no longer have to provide payment summaries to their employees for payments that have already been reported on through STP.
Is my business already STP compliant?
If you’re completing your pay-runs through QuickBooks Online then yes, you’re already using an STP compliant software with our built-in payroll solution from KeyPay! You do need to make sure that you are including all employees in these pay-runs, this includes full-time, part-time and casual employees.
What does STP mean for accountants?
If you’re an accountant or bookkeeper with clients who are small business owners there will be a couple of changes to how you complete a pay-run on behalf of your clients. First, you’ll need to set up STP in your QBOA business settings by visiting the ATO Setting tab and marking yourself as the registered Tax/BAS Agent filing reports to the ATO. You will then be able to enable STP.
Once your client’s file is set-up for STP, you will require authorisation from your client each time you lodge a pay event. After completing and lodging the pay-run you will need to select Request Client Authority which will auto-prompt an email to be sent to your client to approve. Alternatively, your client can authorise you to act on their behalf for STP lodgment by completing an STP engagement authority form. Take a look at the ATO’s website for more information.
What information is sent with STP?
With STP, each time you submit a pay-run employees’ salaries and wages, allowances, deductions, and other payments, PAYG withholding and superannuation information will be shared with the ATO.
So, will a BAS still need to be lodged?
Yes, you’ll still need to submit a BAS. The good news is the W1 and W2 values will be pre-filled.
The introduction of compulsory STP is a huge change for small businesses and accountants and bookkeepers alike but luckily, with solutions such as KeyPay in place with Quickbooks Online, the transition to regular reporting won’t be too much of a challenge.
If you’re unsure of what STP means for you or want to learn more, ask the community how they’re preparing for this change by commenting below – we’re always here to help.