Single Touch Payroll (STP) in a nutshell
STP is new way of reporting tax and super information to the ATO. Businesses with 20 or more employees already report this way but, on 1 July 2019, it's being expanded to include employers with 19 or fewer employees. The information is sent to the ATO either directly from your payroll software, or via a third party provider.
How will Single Touch Payroll work?
Is there any benefits?
One key change, which most businesses will see as a benefit, is that you will no longer need to prepare payment summary annual reports. This is because they will be getting all the data they need every payrun. You also won't be required to send your employees their payment summaries because the ATO will use your STP reports as their record of pay, tax and superannuation contributed. Employees will instead be able to see the equivalent of a payment summary in their myGov account.
What do I need to do to ensure compliance?
Firstly, you won't be able to use paper forms for any STP reporting - you'll have to submit the required payroll data online. Most businesses already using an online payroll system should be able to simply request an STP data transfer addon.
Popular payroll systems such as Xero, MYOB, Keypay and ClockOn all have an STP transfer service enabled which can quickly and easily be switched on. If you're not using an online payroll system, the ATO have put together a list of recommended no-cost or low-cost solutions. Solutions start from just $9/month for 1 to 5 employees. As well and ensuring your business is STP compliant, you will most likely find some other benefits and efficiencies to using an online payroll system.
How long do I have to get this sorted?
19 or fewer employees: STP reporting will be compulsory from 1 July 2019
20 or more employees: STP requirements started 1 July 2018
Existing ClockOn Customer?
Simply register for ClockOn’s Managed STP Service via the link above. The ClockOn implementation team will assist you in the setup allowing you to easily report to the ATO through ClockOn’s STP Wizard. The steps involved will be:
- Approve and validate your timesheets – as normal
- Process your payroll in ClockOn – as normal
- Generate your employee’s payslips – as normal
- Export and upload the EFT files to your bank – as normal
- Run a Payroll Submission in the Single Touch Payroll Wizard
How often will I need to report?
You will be required to send your tax and super information on or before each payday. The ATO calls this a ‘pay event’. You are not required to change your current pay cycle and you can continue to pay your employees weekly, fortnightly or monthly. You can also have different pay cycles for different employees if that is required.
What do I do if I have made a change to an employee?
If changes are made to the employees YTD values that were submitted such as their payroll was rolled back and reprocessed differently or the YTD values were manually altered in the employee setup. The figures will be updated in the next pay cycle, once you have performed a payroll submission. These changes do not need to be updated each time a change is made.
More information on STP for existing ClockOn customers.