ATO Single Touch Payroll Changes

Single Touch Payroll is changing the frequency of employer’s reporting obligations for their employee’s wages and superannuation to the Australian Taxation Office.
Beginning the 1st of July 2019, employers with fewer than 20 staff will be required to be part of the Single Touch Payroll (STP) system.

What does that mean for my business?

When you run your payroll for your employees and provide them a payslip, your software is likely to already have STP included as part of the package. The STP software will then forward a report to the ATO which will include information in regards to the pay run you have completed. This will include salaries and wages paid, PAYG withholding obligations and superannuation information.
At the end of the financial year, you will need to finalise a declaration to the ATO to state that you have finished your STP reporting obligations for the financial year. This will finalise your STP reporting and you will not have to complete a PAYG Payment Summary or Reconciliation for your employees.

What does it mean for my employees?

Your employees will have no additional paperwork or obligations that they need to complete. Once the STP information has been reported to the ATO, the employee will be able to access their year-to-date tax and superannuation information via their myGov account. This information will be updated after every pay cycle.

What are my options?

There are a few options to choose from to enable you to report your STP obligations to the ATO.
Existing payroll or accounting software
Many of the current accounting software solutions available already have STP built into the payroll section of their software. If it is not obvious or you are unsure whether you have access to STP, please contact your software provider to check.
 STP enabled payroll software
If you do not currently use payroll software for your employees, then there are several different payroll software options available. Some providers (Quickbooks, Myob, Xero, Reckon) are producing a payroll system only for 1-4 employees for $10 per month. These cheaper payroll options are not yet available from the major software companies, however, many are beginning to advertise details of software being available in April and you can register your interest with the provider so you can be notified of updates on availability.
 CKM Partners
As a registered tax agent, we will be able to complete your STP obligations for your business on each pay run. The STP will be lodged electronically via our software directly with the ATO. At this stage the software update will be available at the end of April so we will be able to provide further details on what information we will require from you in order to successfully lodge your STP requirements in a timely manner.

Where to from here?

As we have 3 months to prepare for the new system, there is some time available to assess what option best suits your business. As the software providers are slowly releasing their payroll only options, being informed of what information is required in order to register for STP and having all of your employee’s up to date to be able to setup the new payroll software will be important. Once the software is available, then hopefully it will be a smooth transition to enter the employee’s details and begin using the software.

Please note, as this system will be electronic and potentially involving several areas of compliance (wages, PAYG and superannuation), the timeliness of the STP reporting is extremely important. The ATO will be lenient with penalties for the first year of transition, but we should try and meet all of the obligations in a timely manner so we are well practiced for the 2020 year where the ATO will impose penalties on late lodgements.

CKM Partners can help you

If you need any assistance in assessing the payroll obligations of your business then please let us know. As there are several STP options available, we can discuss these with you and help you decide which option best suits your position.
If you decide that you do not wish to utilise the payroll software options available from third parties, we can lodge your STP obligations directly with the ATO on your behalf.