Have you heard of Single Touch Payroll? Chances are if you own a business, you’ve been made aware of the Australian Taxation Office’s introduction of Single Touch Payroll that will replace regular payroll reporting. Larger businesses of over 20 employees or more have already switched over to Single Touch Payroll as of July 2018, and now the time for small businesses to transition into STP is looming around the corner. With the deadline of 30 September just a stone’s throw away, small businesses that are yet to switch over should go like lightning to ensure that they are compliant as soon as possible. If you are a small business that is in the midst of switching to STP, this is the article for you. Today we look at exactly what you should know about Single Touch Payroll, so read on to find out more.
Single Touch Payroll is an initiative by the Australian Taxation Office which will replace all payroll reporting by the end of 2019. In the past, business owners were required to provide the ATO with annual payment summaries at the end of every year. Employers were also required to offer employee payment summaries to anyone that was hired by the company.
With the introduction of Single Touch Payroll, businesses will now be required to report to the ATO on a payment-to-payment basis instead of an annual basis. Whilst this sounds tedious, it is actually a very simple process that is done both digitally and automatically with the aid of Single Touch Payroll software. STP software assists businesses in generating reports that are automatically sent off to the ATO. These reports are also required to be in accordance with the Standard Business Reporting format as specified by the ATO.
Another thing to keep in mind is that Single Touch Payroll software will provide the ATO with pay-by-pay reports and employers will only need to notify the ATO when they have made the last pay run for the financial year.
Because reports have to be in a strict format before being sent to the ATO, it is important that business owners ensure that their payroll software is up to date with Single Touch Payroll requirements. If you are currently using online payroll software, you will have to ensure that your software provider had updated to remain compliant with STP standards.
Those using desktop software will need to find a service that can upload payment reports, digitalise, format and send them off automatically to the ATO. Similarly for those who are still using paper reporting or excel sheets, you will have to find a service that can convert your data into a digitalised and formatted copy that can be sent off on your behalf.
Employees will now be able to log into their myGov accounts if they are looking to find their payment summaries. Because all reports will be sent in digitally, eliminating the need for paper, your employees now have the luxury of accessing their payment summaries on the go, regardless of where they are. There they will be able to find details on superannuation, tax and the wages that they have been paid.
And there you have it, everything you need to know about Single Touch Payroll. If you are a small business owner, we urge you to make the transition as soon as possible. With a little prior knowledge and planning, you’ll find that the switch to Single Touch Payroll is so much easier than you could have ever imagined!