Single Touch Payroll
From key dates to the latest on STP Phase 2 reporting, ensure your business is compliant with the ATO.
Everything you need to know about single touch payroll in Australia.
What is Single Touch Payroll?
Single Touch Payroll (STP) is an ATO compliance regulation that requires employers to send employee payroll information including salary, wages, PAYG withholding and superannuation to the ATO at the same time as their standard pay run.
Single Touch Payroll is a significant change that will require many employers to upgrade or replace their payroll system this financial year in order to meet their payroll reporting obligations.
Transcript
Single Touch Payroll
Here is Tom. He is pretty chuffed with himself, aren’t you Tom?
He is already getting his business set up for STP.
STP or single touch payroll, is a new reporting method of sending employee payroll information to the ATO.
Information such as salaries, wages, PAYG withholdings and superannuation will be reported directly to the ATO in the standard pay run, instead of at the end of financial year.
Reporting each pay run saves time and resources for businesses at the EOFY and gives employees easy access to up to date payment information through their MyGov account.
Isn’t that right Tom.
On the 1st of April 2018, Tom is going to do a headcount of his employees.
If he has 20 or more, STP will be mandatory from 1st July 2018.
If he has 19 or less he can still use it and get a head start before it becomes mandatory on the 1st of July 2019.
Tom is counting down the hours until it starts, STP will save his business valuable time around the end of year without having to process all those employee, it’s already done making it much easier.
His employees will also benefit from access to payment information on MyGov as well as pre filled tax return forms and online commencement forms that will make starting a new job easier.
As a result of these changes, Tom needs to pick an STP ready payroll software to remain complaint. He chose to use Reckon software.
Reckon is part of the Australian Business Software Industry Association (ABSIA) who are
working collaboratively with the ATO to help shape and influence the design and
implementation of STP.
All Reckon products with Payroll functionality will be STP enabled and ATO certified
including:
• Reckon One
• Reckon Accounts Hosted
• Reckon Accounts Desktop
• Payroll Premier
For more information go to reckon.com/stp and get your business ready for the future of payroll.
Just like Tom.
STP Phase 2 Reporting
STP Phase 2 comes into effect on 1 Jan 2022, requiring additional information to be reported to the ATO. The new requirements will enable other government agencies to leverage the STP infrastructure to support the administration of the social security system.
STP Phase 2 will involve the capture of the following new fields:
- employment basis
- paid leave
- allowances
- overtime
- cessation details
- salary sacrifice
- lump sums
- country codes
You will also be required to separately itemise the components which make up the gross amount including bonuses, directors fees, paid leave, salary sacrifice, overtime and allowances.
What does STP mean for employers?
Traditionally employers lodged their payroll information via paper or manual submission once a year to the ATO by the 14 July deadline.
Under STP, employers send payroll information to the ATO at the same time as they pay their employees typically weekly, fortnightly or monthly via their payroll software. This means pay runs and payroll compliance are combined into one process.
Single Touch Payroll key dates
1 January 2022: STP reporting phase 2 begins.
1 July 2021: Employers with only closely held employees or non-business employers, such as carers holding a Withholding Payer Number (WPN), need to start STP reporting.
1 July 2019: Single Touch Payroll became mandatory for ALL employers. With special rules for STP micro employers.
1 July 2018: Single Touch Payroll became mandatory on for employers with 20 or more employees only.
Frequently asked questions
What are the STP employer benefits?
- PAYG payroll reporting (your STP report) is combined with your pay run process. You send this information to the ATO every payroll event instead of once a year in July, helping you gain valuable time around end of financial year.
- The ATO pre-fills PAYG withholding payroll fields W1 & W2 in your BAS, eliminating potential errors and double handling.
- You are no longer required to generate and distribute payment summaries to employees as this information is available online via a myGov account.
- On-board new employees quickly with online commencement forms including Tax File Number Declaration and SuperChoice.
What are the STP employee benefits?
- Real-time access to year-to-date payments and contributions via MyGov including superannuation, income and tax.
- Your payroll information is pre-filled in your tax return, making it easier and quicker to complete as you won’t need to wait for a payment summary from your employer. They report it during the year via their STP reports.
- Electronic commencement forms including a pre-filled Tax File Number Declaration and SuperChoice form makes starting a new job easier.
What is a closely held employee?
A closely held employee is a person who’s directly related to the business, company or trust that pays them. In most cases this is:
- a family member of a family business
- directors or shareholders of a company
- beneficiaries of a trust
A regular employee not directly related to the business is sometimes refereed to as an arms length employee.
Are there any concessions or deferrals for my business?
There are a number of concessional reporting options available for specific businesses or those experiencing exceptional circumstances. Eligibility depends on your circumstances, please see the ATO website for more information.
Situations where STP reporting is not required
You may no longer be required to lodge Single Touch Payroll (STP) reports if your business:
- no longer has employees
- has ceased trading
- has changed structure
- is not paying employees for the rest of the year
- is paused due to COVID-19.
See the ATO website for more information on your specific circumstances.
Choose a payroll plan that suits your business
All payroll plans include unlimited employees and unlimited STP reporting!
payroll
$6
For the first 6 months, then
just $12/m with code MOCF506M*
was $12
Unlimited employees
Pay runs & payslips
Single Touch Payroll
Pay your employees
Calculate superannuation
Track leave & allowances
Pay summary reporting
Free phone support
Free onboarding session
Enter payments and expenses
Track and report GST for BAS
See cash flow in real-time
Create budgets
Unlimited invoices & bills
PAYROLL + ACCOUNTING
$12
For the first 6 months, then
just $24/m with code MOCF506M*
was $24
Unlimited employees
Pay runs & payslips
Single Touch Payroll
Pay your employees
Calculate superannuation
Track leave & allowances
Pay summary reporting
Free phone support
Free onboarding session
Enter payments and expenses
Track and report GST for BAS
See cash flow in real-time
Create budgets
Unlimited invoices & bills
PAYROLL + ACCOUNTING + INVOICES
$16.50
For the first 6 months, then
just $33/m with code MOBB506M*
was $33
Unlimited employees
Pay runs & payslips
Single Touch Payroll
Pay your employees
Calculate superannuation
Track leave & allowances
Pay summary reporting
Free phone support
Free onboarding session
Enter payments and expenses
Track and report GST for BAS
See cash flow in real-time
Create budgets
Unlimited invoices & bills
*Offer only available to new Reckon customers. Your subscription amount is 50% off for the first 6 months. The offer applies to the first Reckon One book only. The coupon code must be used to receive the discount. The offer expires on 30/09/23 unless withdrawn earlier. Transactions that exceed the 1000 limit will be subject to the BankData Fair Use Policy.
Get STP ready today with Reckon
We’ve got ATO complaint solutions to suit any business.
