Under the Single Touch Payroll reporting regime, which went into effect on July 1, 2019, employers are now required to record all salaries and wages paid, together with PAYG withholding and superannuation information, on a regular basis throughout the year (STP).
Small firms with 19 or fewer employees were only obliged to report employee wages and superannuation to the ATO annually at the end of the financial year, while large employers with 20 or more employees were the only ones needed to report through STP.
What is STP
In order to achieve real-time reporting efficiency and support your compliance operations, the ATO notes that “STP gives the ability to streamline your reporting as opposed to having a number of different reporting processes.” In essence, it’s a new method for firms to submit tax and super data to the ATO each time they pay their employees.
STP pertains to:
- a sum of money given to an employee as salary or compensation
- paying a company’s director a salary
- gratuity to a person for returning to work
- employee pay-outs upon termination
- Paid for unused time off
- Pay for parental leave
- Amount paid to a worker under the Seasonal Labour Mobility Program
Other optional information that may be supplied to the ATO as part of STP reporting includes:
- Reportable employer contributions to superannuation
- Amounts of reported fringe benefits
How STP works
EMPLOYERS
Each time an employer pays its employees, the ATO must receive information about the employee’s salary, wage, PAYG, and superannuation. There are two options for reporting:
- Payroll software that supports STP will submit a report directly to the ATO. (You must confirm that your software vendor offers STP-enabled solutions.) If not, you must locate a service provider who ds), or
- through a third party, such as H&R Block, who will submit reports on your behalf and serve as an external service provider.
If you don’t utilize payroll or accounting software that supports STP, you can:
- Utilize the ATO’s online tools to request a deferred start date from the ATO and ask for extra time to prepare.
- If you reside in a location with spotty or no internet access, ask the ATO for an exemption.
- Use a “low-cost STP solution” that costs less than $10 per month if you are a micro-employer with 4 or fewer employees.
For assistance with the transition and, if necessary, to manage your move to STP over a longer timeframe with the ATO on your behalf, talk to H&R Block Business Services if your company does not yet have STP-compliant payroll software. This assistance may include applying for a deferral on your company’s behalf.
EMPLOYEE DETAILS
Employees can access the ATO’s online service through myGov and view their year-to-date super information with STP.
Employers are not mandated to give employees an annual payment summary until information have been reported and finalized through STP. Employees or their registered agent will be able to file their tax returns using the STP data once it is finalized and made available by the ATO. A statement of income is what this is.
GET QUALIFIED HELP
As a registered tax and BAS agency, H&R Block can help you set up STP reporting to the ATO or, alternatively, help you with your STP requirements.