Single Touch Payroll | What You Need to Know

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Single Touch Payroll | What You Need to Know

By now, you would be aware of the changes coming to the way in which tax and superannuation reporting is being conducted by the Australian Taxation Office (ATO), with the compulsory implementation of Single Touch Payroll (STP) for businesses with less than 20 employees. Although STP has been rolled out for large businesses since mid-last year, it’s now time to think about what you need to do to make sure you’re STP ready.

What Is Single Touch Payroll?

It’s a new, simpler way for employers to lodge the payroll of employees directly to the ATO.

From 1 July 2018, STP reporting became mandatory for employers with 20 or more employees. From 1 July 2019, small employers with 19 or fewer employees are also required to adopt STP reporting.

 

How Does It Affect Me?

Instead of typically reporting payment once at the end of a financial year, you will now be required to send information to the ATO with every pay run using your cloud-based software.

If you’re not already using cloud-based accounting software in your business, then there are several low-cost options being developed specifically with micro to small businesses in mind. These options are low cost (at around $10.00 a month) and are already starting to be rolled out.

In your current software, it’s important to upgrade your software to ensure that the STP add on is installed. Contact your software help centre, accountant or bookkeeper for further assistance if required.

 

What Will Be Reported? 

There are three main areas where employers will need to report payments. These are payments such as:
1. Salaries and wages
2. PAYG withholding
3. Superannuation contributions

The ATO has created some guidelines around this, which you can find here. However, your cloud-
based accounting software will make this process simple and effective to do.

 

How Does It Work?

We’ve broken down how STP works into the following three steps:

1. After you run a payrun and issued payslips to your employees, you will need to report this payrun data to the ATO.

2. A Standard Business Reporting (SBR) file will be automatically created by your cloud-based software, which needs to be lodged with the ATO. The SBR file contains the wages information that you’ve just processed.

3. The ATO will check whether this report data matches the information that they have on employees and based on that your report will be Approved or Declined.
a. If Approved – the payrun will show as filed; however,
b. If Declined – you will need to check and update the staff’s details to ensure they match current ATO records.

 

Before Your Lodge Your First STP Report 

There are a few things to keep in mind before you lodge your first STP report. We’ve put together a checklist of the important things to do before the 1 July 2019 rollout.

  • That you have authorised the right person in your business to lodge an STP report on your
    behalf.
  •  The ATO have the right contact person for your business.
  • If you need an AUSKEY (and apply for one if you do)
  • Advise the ATO of your SSID number
    This is the number used to identify your accounting software, similar to a serial
    number. Simply call 1300 85 22 32 or get us to help with informing.
  • Count your employees.

To Review

Before 1 July 2019, you should ensure that you are:

  • Paying your employees correctly
  • Calculating your employees’ super entitlements correctly
  • Addressing overpayments correctly
  • Maintaining accurate information including names, addresses, and date of birth records.

Questions

If you have any questions about STP, how to implement it, where to start or what to do, feel free to contact us at support@walkerhill.com.au or call our office on 07 3367 3155 to organise a meeting.