In July 2018, Single Touch Payroll was implemented for businesses with over 20 employees.
The change initially brought about some confusion but ultimately set out to streamline payroll reporting for employers and employees. Now, from July 1, 2019, employers with 19 or fewer employees will also be included, which means, all employers must use Single Touch Payroll.
If the change didn’t affect your business last year, you probably didn’t take much notice of it. Luckily, we’re here to help get everyone up to speed with the new changes! Keep reading to find out what Single Touch Payroll is, what’s changed and what you need to know.
What is Single Touch Payroll?
Last year, the ATO deemed older methods of reporting tax and super information to be inefficient, so they implemented Single Touch Payroll. It’s said to be the next step in streamlining payroll reporting. To put it simply, STP offers real time alternative to end-of-year payment summaries. All business owners will now report all payments such as salaries and wages, and Pay As You Go (PAYG) withholding and superannuation information, each time they pay their employees. There will be no changes to your payroll cycle with the implementation of Single Touch Payroll.
If you’re currently using a software that offers STP reporting, such as a payroll or accounting software, you will send your employees’ tax and super information directly to the ATO, each time you pay your employees. This information is either sent to the ATO directly from the software that you use, or through a third party, such as a sending service provider. If you’re a smaller business that doesn’t already use a payroll software, you may be able to utilise the no-cost and low-cost STP solutions that are available.
What’s the next step?
To prepare yourself for the implementation of Single Touch Payroll on July 1, 2019, you should update your payroll software to ensure STP is enabled. Software such as MYOB and Xero should already have STP enabled but if you’re still unsure, it’s best to contact us. We’re here to help and if you have any questions, don’t hesitate to get in touch with us at Toohey Reid.
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