It’s time to get ready for Single Touch Payroll
Originally published by ATO.
Single Touch Payroll – Are you ready??
From 1 July 2019, there will be major changes in the way all employers report employee obligations to the Australian Taxation Office with the introduction of the new Single Touch Payroll System (STP).
Single Touch Payroll (STP) will be the new way to send tax and super information to the tax office directly from your payroll or accounting software each time you pay your employees. If you use payroll software, it may need to be updated to enable STP reporting. Talk to your accounting software provider (like MYOB, Xero, Quickbooks etc) to find out how to update your software.
- Employers with 20 or more employees should already be reporting through their current software
- Employers with 19 or less employees have the option to report through STP for now.
- “Closely-held” employers, employing only Mum, Dad and other family member staff will have until 1 July 2020 to comply.
When you use STP-enabled software, you will send the tax office your employees’ tax and super information each time you pay your employees.
The information you report will include your employees’ salaries and wages, allowances, deductions (for example, workplace giving (Donations via your employer) and other payments, pay as you go (PAYG) withholding and superannuation information.
At the end of the year you will need to now do a ‘finalisation declaration’ at year end to notify the taxation office that everything has been checked and is now final. The STP will not be ‘tax-ready’ until this has been done.
What is changing for SuperannuationGuarantee Payments (SG)
Super liabilities will now start to be reported to the tax office each pay period for the first time through Single Touch Payroll. The liability is the amount that you would normally provide to your employees on their payslip. Super funds will then report to the taxation office once you have paid the super amount to your employees’ chosen or default fund.
What will change for your employees?
Once you start to report you will not longer need to provide payment summaries to your employees. Employees will need to view their year-to-date payment information using ATO on line services via their myGov account.
What should I do if my current software does not have STP reporting functionality?
You can ask a third party like NBC, your bookkeeper or payroll service provider, to report on your behalf.
The taxation office has also asked software developers to build low-cost Single Touch Payroll solution as or below $10 per month for micro employers (1-4 employees). The ATO has published a list of these on their web site when they become available.
Contact the team at NBC to talk about your options today.