Big news for businesses with less than 20 employees…
The Bill to extend Single Touch Payroll (STP) reporting requirements to apply to all employers, regardless of the number of employees, has now passed. While STP was only previously available to ‘substantial employers’, STP will be rolled out and made available to smaller organisations from July 1st, 2019.
But what does this mean for smaller organisations and what do you need to know moving forward? Don’t worry, we’re here to help answer questions and help make this transition an easy one for you. Beginning with…
What is Single Touch Payroll (STP)?
STP is a reasonably new and more simplified way of reporting Tax and Super information to the ATO. It works by sending all of your business’ relevant information to the ATO as you run payroll, allowing your reporting process to be more streamlined, minimising room for error, improving access to new employee information (directly through MyGov), while additionally eliminating the need for payment summaries.
What’s your next step?
Since STP requires that your payroll transaction data is transferred to the ATO every time you pay someone, you need to ensure you are using an STP compatible software solution that will correctly transmit this data on your behalf.
You will need to follow the steps in your STP compatible software (i.e Xero or MYOB) to set up STP reporting. This will ensure that each pay cycle that comes and goes, you will have automatically reported the following to the ATO:
- each employee’s name and tax file number (TFN)
- gross amount paid
- tax withheld on the gross
- ordinary time earnings for the period, and
- any superannuation guarantee obligations.
The ATO will then report to you each month or quarter the correct amount of PAYG tax withheld to pay in your activity statement. Also, information will be available each quarter regarding your superannuation obligations to either pay the ATO clearing house or your independent provider.
Where can you find more information?
For more information on what STP is, how it works and what changes you may need to make to ensure you’re ready by the July 1st mandatory date, simply get in touch with us. We are here to help you during this transition process!