Single Touch Payroll (STP)

By Nicola Jones, BAS Agent - 27 June 2019

OK so winter is here and STP has nothing to do with Game of Thrones. It stands for Single Touch Payroll.  Still none the wiser? Don’t worry, you aren’t alone, but if you are one of the 700,000 small businesses in Australia with one or more employees, then you need to be.

 

So what exactly is Single Touch Payroll reporting? STP is the reporting of Employee Payroll information to the ATO on Payday, and it is a legislated requirement for all Employers from 1st July 2019. Now, instead of waiting until year end to give Employees payment summaries, STP requires data to be collected throughout the year with your normal pay run activities.

 

ATO Commissioner Chris Jordan explains that extending STP to all Employers helps to ensure all Australians get their full superannuation entitlements, while giving greater transparency and leveling the playing field for small business. It is an important step in streamlining business reporting and keeping pace with the digital age by allowing real-time digital reporting.

 

Approx 70% of you already use online software for your payroll, and many of these providers have enabled simple changes in their payroll processes to ensure they are STP compliant. Xero, accounting software for small businesses, has allowed early opt-in and many of our clients have already taken it up.  To ensure everything is turned on correctly and to avoid initial teething problems ask your Bookkeeper or Accountant to help you through the steps.

 

For the rest of you – don’t panic. ATO Commissioner Chris Jordan reassures small businesses that the ATO approach will be flexible, reasonable and pragmatic. In particular, the ATO understands there will be circumstances where more time is needed to implement STP or lodge reports.

 

The ATO has worked closely with software developers to ensure a range of low or no-cost reporting solutions are now available on a variety of platforms. One such solution is Xero’s new Partner only payroll solution for $10 a month.  Xero Advisor Kerry Bowden points out that the new Xero payroll solutions are designed to help small business become STP compliant with as little change to workflow as possible. A simple ‘two clicks and a tick’ process at the end of each payrun is all it takes. Fast intuitive and easy. 

 

For a full run down of the software available to meet STP compliance visit www.ato.gov.au/Low-cost-Single-Touch-Payroll-solutions or contact us for an assessment of your options, now and into the future.  Remember, doing nothing is no longer a choice; STP is coming, ready or not.