I was recently having a coffee catch up with a friend, when she mentioned she had received a letter from the ATO. When the sentence “register for Single Touch Payroll” appeared, naturally (like most people) she admitted that she had no idea what that meant.

So What is Single Touch Payroll?

The Australian Tax Office (ATO) defines Single Touch Payroll as  “A new way of reporting payroll information [to the ATO]”. Single Touch Payroll is a regulation that requires a business to report their pay information with each pay run.

Payroll information is everything that is related to your employee’s payroll, including: the gross wages, withholding taxes as well as superannuation contributed.

Single Touch Payroll is making payroll digital. All employers will have to submit their reporting through a digital platform that can be used to communicate with the ATO.

Who does it affect?

Single Touch Payroll affects anyone who employs and pays wages within Australia.

What- is -single -touch -payroll?

Employers with 20 or more employees

Starting the 1st of July, 2018, reporting with Single Touch payroll became compulsory for employers with 20 or more employees.

Employers with 19 or less employees

Starting the 1st of July, 2019, Single Touch Payroll became compulsory for employers with 19 or less employees.

*Reporting of STP varies for each type of employer

Employers with 1 to 4 employees

Employers with 1 to 4 employees have the option to report every quarter through either, a registered Tax Agent or a BAS Agent up until the 30th of June, 2021.

To avoid any penalties please contact the ATO or your registered Agent to confirm your reporting requirements.

Types- of- Employers- Single -Touch -Payroll

Types- of- Employers- Single -Touch -Payroll

 

Employers with closely held payees

For employers employing employees (try saying that 5 times) related to the business, also known as closely held payees there are special reporting requirements that must be met.

Closely held payees include: Directors, Trustees, Beneficiaries and Family Relations in a family owned business (visit the Australian Tax office or contact your Accountant for more information.)

n.b If you employ less than 19 employees with closely held payees, Single Touch Payroll becomes mandatory from the 1st of July, 2020.

To avoid any penalties please contact the ATO or your registered Agent to confirm your reporting requirements.

 

Is Single Touch Payroll Compulsory?

Beginning from the 1st of July 2019, Single Touch Payroll became compulsory for all employers.

There are however a few exceptions to that above rule. These apply for instance to employers who have 1-4 employees*.

*See above for reference.

Single- touch- payroll- dates- to- remember

Single- Touch- Payroll- Dates- To- Remember

How do you get ready for STP?

You will need access to a STP enabled software. This is one that meets the reporting requirements of the ATO.

Reporting can also be done through your Registered Tax or Registered BAS Agent or a Payroll Services provider.

When is single touch payroll reported?

Generally single touch payroll is reported or lodged with each payrun, however reporting and corrections can also be made on subsequent payruns.

In summary to get started

  • Find an STP reporting compliant software.
  • Get your business registered for Single Touch Payroll.
  • Get a BAS Agent or Tax Agent to complete or review your setup.
  • Start reporting.

If you still have any more questions do not hesitate to contact me.

Your Friendly Bookkeeper Bridget

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