Single Touch Payroll (STP) is a recently introduced Australian government initiative that changed when and how small businesses report payroll activity to the Australian Tax Office (ATO). It aims to reduce employers’ reporting burdens to government agencies by removing the payment summary annual report and payment summary and creating a simplified process. Now, businesses send a report after each payday, and those reports must be submitted digitally, using a very specific format.
What is STP?
As per the ATO, STP ensures compliance processes are simplified while improving the reporting efficiency. In essence, it’s a new and improved way for employers to report tax and super information to the ATO every time they pay their employees.
Because employers now update the ATO on a pay-by-pay basis, thre is no longer a need for a payment annual summary report at the end of each financial year. Instead, employers simply let the ATO know when they’ve made their last pay run of the financial year for their employees.
STP applies to:
- A payment to an employee, such as salary or wages
- Remuneration to the director of a company
- Return-to-work payment to an individual
- Termination payments to employees
- Unused leave paid
- Parental leave pay
- Payment to an employee under the Seasonal Labour Mobility Program
Other non-mandatory details that can also be provided to the ATO under STP reporting include:
- Reportable employer superannuation contributions
- Reportable fringe benefit amounts for employees
- Payments made to contractors outside the payroll (contractors paid through the payroll are to be reported through STP)
How does it work?
As an employer, you must report your employees’ salary, wage, PAYG, and superannuation details to the Australian Taxation Office (ATO) every time you pay them. You can do this by:
- Using STP-enabled payroll software, which will automatically send a report to the ATO on your behalf. Check whether your current software offers this feature. If it doesn’t, you’ll need to switch to one that does.
- Letting a third-party service provider like Hopscotch Accounting report on your behalf.
If you don’t use STP-enabled payroll software, don’t worry. You can:
- Apply for more time to get ready using the ATO’s online forms.
- Request an exemption if you live in an area with an unreliable internet connection.
- Use a low-cost STP solution (for micro-employers with four or fewer employees) that cost less than $10 a month.
Our expert team at Hopscotch Accounting can assist with setting you up for STP reporting to the ATO or, alternatively, assisting with your STP obligations as a registered tax and BAS agent.
To learn more about how we can help, contact us at 1300 HOP or admin@haccounting.com.au
