What is Single Touch Payroll?
Most businesses will already know what Single Touch Payroll (STP) is all about.
STP was introduced progressively in 2018 and 2019. Larger employers with over 20 employees started first and then those with under 19 next. STP has streamlined reporting to the Australian Taxation Office by providing payroll information more regularly. Information that gets reported includes salary and wages, PAYG withholding and superannuation amounts.
During these first phases of the STP reporting roll out many businesses were able to apply for exemptions. These mainly included Micro Businesses and those with Closely Held Employees. This is what is now going to change moving forward….
What are the Changes?
As highlighted above there were two main exemptions to the earlier implementation of STP reporting. These were for:
- Closely Held employees (family members, company directors etc)
- Micro Employers (less than 5 employees). These employers were able to initially report on a quarterly basis.
These exceptions are ending on the 30th of June 2021.
After this date Closely Held Employees will need to be included in ongoing STP reporting. This new stage offers a couple of options for reporting for Closely Held Employees:
- Report actual payments at the time the payment is made,
- Report actual payments on a Quarterly basis when completing the Business Activity Statement (BAS)
- Report a reasonable estimate on a Quarterly basis when completing the BAS.
For Micro Employers, the new rule is that employees need to be included in STP and payments must be reported every pay day.
More detail on the specific changes can be found at the ATO website. If these rules apply to you, Contact Us and we can help make the change easy for you.
How to get ready for the STP changes?
If you do not yet undertake STP reporting then you will need to by 30/06/2021.
Before then there are some things you might consider while you get yourself Single Touch Payroll ready. Don’t worry, we can help with each of these steps.
Review you reporting data
Make sure that your data is correct in the following areas:
- Payroll – Check if your PAYG withholding calculations are correct.
- Superannuation – Check if your superannuation contributions are correct.
- Employee master files – It is important to make sure your payroll records match the ATO. Make sure that your employee data is up to date (including full names, addresses, tax file numbers and date of birth).
Review your business processes
While you are checking your reporting data it can also be useful to make sure that your business processes are correct. Make sure you are paying your employees correctly and that you are addressing overpayments or amendments correctly.
Employees will be able to view their payment information on myGov after each payment so make sure that obligations and any withheld payments are reported correctly.
Communicate these changes to your employees
STP is designed to improve the transparency in the payroll process and to provide current information for your employees.
Talk to your employees about the changes that are coming. Registering with myGov is important for all your employees. Via this platform they will be able to view information about their current earnings, as well as being able to access a range of government services.
How can Trade Guardian help?
Making sure you are compliant with these new STP changes is important.
We are here to help you with this transition. We can assist with the set up, a review of your current processes, and of course help with processing payroll and also undertaking STP reporting for you.
If you or someone you know needs any assistance in implementing these changes please Contact Us.