STP – Single Touch Payroll
The Tax Office is contacting employers with 19 or fewer employees and already use payroll software. They are informing the employers about Single Touch Payroll (STP) and reminding them that they don’t need to wait for legislation to pass to start reporting through STP. If their payroll software offers STP they can update their software and start reporting now.
The Tax Office are letting them know that they can contact us (your BAS or Tax Agents) if they have questions, and that their digital service provider will let them know when their software offers STP.
Employers with over 19 employees are already reporting and the legislation that has not yet passed for employers with 19 or fewer employees to start lodging from 1 July 2019.
STP essentially changes the way we report payroll information to the Tax Office. Every time employees are paid, you’ll send your employee salary and wage information, PAYG withholding and superannuation information to the Tax Office. These are year to date amounts, not the amounts of each pay run. Ultimately, this will remove the need to lodge PAYG Payment Summaries at end of financial year as the Tax Office will already have the information.
Superannuation is still processed through the clearing house/s but when a payment is made, the superannuation fund reports to the Tax Office. This allows for cross-matching of data and the Tax Office will more easily be able to identify those employers who are behind in their employee obligations.
While this isn’t the worst system to be put in place, there are a few downsides. Such as the wages and salaries for related parties to trusts, companies, etc which may then be adjusted when the accountant processes the end of year financial statements and tax returns. This will require a proactive approach to be made throughout the year to ensure the related parties are processed in their best interests.
As your Registered Agent, we are now able to have an enduring authority for 12 months for fixed standard salaries and wages in regards to STP reporting. However, for varying wages and unscheduled pay runs, we need to have an authority to lodge for each separate pay run.
We are happy to assist you set up your STP reporting system or review your current system and make recommendations (if necessary). Contact us to start the process.
Info Sheet: Tax Office STP employer reporting guidelines