Single Touch Payroll (STP)
The 2018-19 financial year has ended. This means that you need to give payment summaries to your employees by 14 July and send payment summary annual reports to the Tax Office. Lodging your report as early as you can will help your employees to complete their income tax returns.
This will be the last year that employers are required to give payment summaries and lodge their annual report using payment summary forms.
If you have started reporting through Single Touch Payroll (STP) and plan to do your full year reporting through STP, you don’t need to provide payment summaries or a payment summary annual report.
Single Touch Payroll (STP) is coming
STP is a change to the way you report your employee’s tax and super information to the Tax Office.
Starting 1 July 2019 for employers with fewer than 20 employees, every time you pay your employees, you will need to report their salary and wage, pay as you go (PAYG) withholding and super information through STP-ready payroll software to the Tax Office.
These rules already apply for employers with 20 or more employees.
You can get a registered tax professional to report for you if they are using STP payroll software.
Start reporting any time from 1 July 2019 to 30 September 2019. If you need more time to get ready, you can apply for a later start date. An online tool to help you do this is available on the ATO website or H&R Block can request on your behalf.
What is Single Touch Payroll?
Single Touch Payroll (STP) is a new way for employers to report tax and super information to the Tax Office every time you pay your employees. It starts from 1 July 2019 for employers with fewer than 20 employees.
You'll report the following information through STP-ready payroll software:
- payments to employees such as salaries and wages
- pay as you go (PAYG) withholding
Super information. The way you pay your employees won't change, however you will send information to the Tax Office each time you pay them.
What is the benefit of Single Touch Payroll?
Previously, employers had to give their employees payment summaries to enable the employees to complete their individual tax returns and submit a payment summary annual report to the tax office after the financial year ended. With Single Touch Payroll, employers will no longer need to give payment summaries to employees and lodge payment summary annual report forms to the tax office.
When employers start using STP payroll software, employees will be able to view their payroll information online from their MyGov account after the employer files pay details each time to the Tax Office through STP payroll software. The payroll information will then be prefilled in the employee individual tax return at financial year end. Employers will have to 'finalise' the employees' EOFY payroll information through the STP enabled software by 14 July 2020 for 2019-20 year.
This action has been taken by the government to improve compliance around pay as you go (PAYG) tax withheld and employer super guarantee payments to employees.
How to get started
- If you already use payroll software - check to see if it offers STP reporting by talking to your software provider or H&R Block tax professional.
- Start reporting any time from 1 July 2019 to 30 September 2019
- If you don't use payroll software - you can choose an STP ready payroll solution or talk to H&R Block for advice on the best solution for your business.
- Ask H&R Block to report through an STP ready payroll solution on your behalf.
- If you have 1-4 employees - you can choose a low-cost STP solution.
You can find more information about Single Touch Payroll on the ATO website ato.gov.au/singletouchpayroll or speak to H&R Block for advice on an STP payroll solution for your business.