Single Touch Payroll: What it is, what to do and when

Single Touch Payroll

Single Touch Payroll (STP) is coming. Are you ready for it?

The new STP reporting framework will impact many employers in Australia from 1 July 2018.

We have decided to give a definitive answer to the top three questions that Australian businesses are asking:

  • What exactly is Single Touch Payroll?
  • What does my business need to do about STP?
  • When are the key dates?

If you operate a business in Australia, you have probably heard a lot about Single Touch Payroll coming into effect.

This is because if you have more than 20 employees, the new Single Touch Payroll requirements will affect your business, no matter what the industry.

First things first, what exactly is STP?

 

What is Single Touch Payroll?

Single Touch Payroll is a government initiative to streamline business reporting obligations.

Through the new Single Touch Payroll regulation, businesses will be required to transmit payroll information to the Australian Taxation Office electronically, at the same time employees are paid.

Here is an explainer video from the ATO:

 

Historically (until 1 July 2018), businesses had to complete and submit payment summaries at the end of the financial year. From 1 July 2018, Australian businesses with more than 20 employees will no longer be required to submit payment summaries as employees’ information will be reported directly to the ATO from the payroll solution.

Information reported to the ATO will include:

  • Salaries
  • Wages
  • PAYG Withholding
  • Superannuation

For this to happen, your payroll solution will need to be STP compliant.

 

What to do

Single Touch Payroll is mandatory for businesses with more than 20 employees. Here is what to do and when to make sure you are ready. Here is our recent Webinar update on the new STP regulation and how it relates to MYOB Acumatica (formerly MYOB Advanced) users.

On April 1, 2018

  1. Count all the employees on your payroll and make sure to include:
    1. Full-time employees;
    2. Part-time employees;
    1. Casual employees who are on your payroll on 1 April and worked any time during March;
    2. Employees based overseas;
    3. Any employee absent or on leave (paid or unpaid);
    4. Seasonal employees (staff who are engaged short term to meet a regular peak workload, for example, harvest workers);
  2. If the total number of employees is 19 or less, no action is required unless you want to adopt an STP solution voluntarily.
  3. If the total number of employees is 20 or more, follow the steps:
    1. Contact your software provider to find out if they offer Single Touch Payroll reporting or if they are rolling out product updates and when;
    2. Connect with the ATO to make sure that they have the right contact details about your business on file;
    3. Review your business processes to make sure that people within your organisation are aware of the change (in particular the payroll staff);
    4. Check that you are paying employees correctly and that you have the correct contact details for your employees on file.

For a thorough checklist, download this form.

 

A Guide to Single Touch Payroll (STP) – Infographic

 

Conclusion

Single Touch Payroll will change the way Australian businesses report to their employees’ payroll information to the ATO.

If your business counts 20 or more employees on April 1, 2018 you will need to be prepared for the change starting on July 1, 2018.

To upgrade to an ERP software that is Single Touch Payroll enabled, call us on 1300 045 046 or email info@leveragetech.com.au

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