What is Single Touch Payroll (STP)?
Single Touch Payroll (also known as STP) is a government initiative to streamline your business reporting obligations regarding payroll. Put simply, STP requires employers (or their registered agent) to report payments such as salaries, wages, PAYG withholding, and superannuation information directly to the ATO from their payroll system. This must be reported after every pay run has been finalised by no later than the employee's payment date.
Does electronic lodgement need to be enabled before enabling STP?
Yes, electronic Lodgement will need to be set up prior to enabling STP. Learn how to set up electronic lodgement.
Is STP an extra cost to my QBO subscription?
There is no extra cost for STP, it’s included as part of your monthly subscription.
If I start STP this financial year how do I account for employees who have terminated this year?
If the employee has been terminated within a pay run and there will be no further payments for that employee in the financial year, tick the Is Final checkbox for the employee/s in the Update Event screen. This will indicate to the ATO that no further payments for this employee will be made you can use the following guide for instructions on this: Creating and Lodging an Update Event
What happens if we terminate employees during a pay run after setting up STP?
If an employee has terminated employment and a termination pay has been processed, the Is Final checkbox should be ticked automatically. If the employee has not been terminated within a pay run and there will be no further payments for that employee in the financial year, you can tick the Is Final checkbox. This will indicate to the ATO that no further payments for this employee will be made.
What is the Is Final checkbox used for?
The Is Final checkbox is used to indicate to the ATO that no further payments for this employee will be made during the current Financial Year e.g. The employee has left the business or during the process of submitting the final pay event for the year.
Do I still need to provide Payment Summaries to my employees?
The ATO has provided the following guidance on this: “You will no longer have to give your employees a payment summary for the information you've reported and finalised through STP. Once you finalise your data, your employees or their registered agent will be able to lodge their income tax return using the STP information available in ATO online.” This will be available for the employees to view in their Income Statement section of their MyGov account. This also applies to terminated employees. For more information visit the ATO website.
My employee doesn’t have a MyGov account. How do they get their Income Statement?
If your employee (or leaver) uses an accountant or tax agent, they will be able to access the income statement from them. If they do not use either they can contact the ATO who can provide an Income Statement to the employee.
What do I do if I have lodged a pay run and realised after that I made a mistake and have to amend?
The ATO’s guidance on this is: “If you make mistakes in your STP report, you can correct it in your following report. We won't penalise you for making mistakes you correct.”
For more information visit the ATO website.
When you pay in advance e.g. holiday periods such as Christmas, when should you lodge the pay run?
You should be lodging the pay run through STP on the day the employees get paid. For payments in advance, lodge the pay run in advance as well.
Does STP change the way superannuation is paid?
The process of paying super to your employees has not changed. To make it easier to pay out super, we recommend setting up Super Payments with Beam.
How does STP work if I've set up automated pay runs?
During the setup process for automated pay runs, there is an option to Lodge Pay Run immediately and the pay event will be created automatically. The selected user(s) will be notified via email that the pay run is finalised and will then need to log in to lodge the pay event with the ATO. For information on setting up automated pay runs in QuickBooks Payroll powered by Keypay, check out the following article: Setting up automated pay runs.
Content sourced from KeyPay