Single Touch Payroll - What you need to know
Single Touch Payroll changes the way that employers report tax and superannuation information to the Australian Tax Office (ATO). At this stage only businesses that employ 20 people or more are required to report to the ATO via Single Touch Payroll. If your business has 19 employees or less you need to be getting ready as legislation is currently being drafted to make it mandatory for you too.
What is Single Touch Payroll (STP)?
Rather than reporting your Payroll information annually to the ATO, under STP you will report Tax and Superannuation information every time you pay your employees. This can only be achieved via Accounting Software or through an external payroll provider. This means that the information is reported to the ATO in real time. This information will then be available to your employees via their myGov accounts.
How will my business manage STP?
For most small businesses you will need to manage STP through your Accounting Software. For most of you this will be MYOB or Xero. If your business using bespoke accounting software you will need to contact support and find out if they are getting the software STP ready. For businesses that do not currently use accounting software the ATO has asked software providers to build low cost STP solutions.
When do I need to ready?
STP reporting started on the 1st July 2018 for employers with 20 or more employees. For business with 19 employees or less the bill is before parliament, has been passed by the senate and now sits before the house or representatives to consider amendments. You don't need to send the ATO a headcount, the responsibility is on you to determine the numbers of employees you have and if your business is part of a company group you must include total number of employees of the group.
What will I need to report?
There are a number of payments subject to withholding that you will need to report under STP. These are:
- A Payment to an employee, such as salary or wages
- A payment of remuneration to the director of a company
- A payment to an office holder
- A payment to a religious practitioner
- A return to work payment to an individual
- A payment for termination of employment
- An unused leave payment
- A payment of parental leave pay
- A payment to an employee under the seasonal labour mobility program
If you report any of these payments during the year you will then be required to provide a finalisation declaration to the ATO by the 14th July for each of your employees using STP. You will then not be required to give your employees payment summaries or complete a payment summary annual report.
If you are not sure or need more informatio about getting your business ready for Single Touch Payroll please call 43 243922 or contact us via our website
|Tags: Bookkeeping Taxation|