3 Steps Business Owners Need To Take to be STP Ready
First off, what is Single Touch Payroll?
Single Touch Payroll (STP) is (another) government initiative that will change the way to report your payroll to the ATO from 1 July 2018.
STP businesses will electronically report salary and wages, pay as you go (PAYG) withholding and superannuation directly to the Australian Taxation Office (ATO) at the same time as you pay your employees as opposed to once a year at the beginning of July.
This new streamlined reporting to the ATO will, in theory, make it easier for you to meet your payroll processing obligations.
3 Key Steps To Be STP Ready:
1. CHECK THAT YOUR PAYROLL SOFTWARE IS READY FOR STP REPORTING.
Everyone who knows us knows that we love Xero. Xero is STP ready and is rolling out the implementation of STP gradually to all of its users. It’s not available to everyone on 1 July, but don’t worry too much about this – they have chatted to the ATO and have extended the deadline to Xero users until 30 December 2018.
If we look after your payroll and bookkeeping, we’ll handle the implementation and change over behind the scenes and work with you to ensure all of your teams data is correct.
If you are unsure that your payroll software will be STP compliant, contact us immediately and we will help you review your business accounting and payroll systems
2. WHEN DO YOU NEED TO START REPORTING USING STP?
If on 1 April 2018 you had 20 or more employees, STP is mandatory from 1 July 2018. For businesses with 19 or less employees, your deadline for mandatory reporting is 1 July 2019, or, if preferred, you can choose to opt in now.
3. IS YOUR PAYROLL TEAM AWARE OF THESE NEW CHANGES, AND YOUR EMPLOYEE DATA UP TO DATE AND ACCURATE?
You don’t want to start using STP with inaccurate employee information – ask your employees to confirm all the personal details you hold on file for them. We’ve also created this simple employee guide to introduce your team to the new changes.
Your STP Checklist
With a deadline of 1 July 2018, and STP impacting many parts of your business other than just your payroll software, we have prepared this employer checklist to make the transition as easy as possible.
STP not only offers benefits to employers, but also employees such as eliminating payment summaries and TFN forms, ensuring super is reported and paid as required and reducing welfare and tax fraud. To unlock some of these benefits, employees will need to be registered on myGov and linked to the ATO.
Once You Start Using STP
- You will no longer need to provide an end-of-year payment summary to employees.
- STP will allow the ATO to better assist you meet your PAYG withholding and superannuation obligations.
- You may have an option to use a new streamlined, prefilled employee commencement process through myGov.
How is the 20 or more employees calculated?
It is based on the number of people you employed on the 1st April 2018. It doesn’t matter if they are part time, full time or casual. It is not based on your full-time equivalent (FTE).
Do I still need to send annual PAYG summaries to my team in July 2018?
Yes, this doesn’t change.
Do I still need to send annual PAYG summaries to my team in July 2019?
No, if you have opted into STP reporting you will no longer need to send annual PAYG summaries to your team in 2019.
If I begin using STP after 1 July, do I have to play catch-up in reporting to the ATO?
No. Each STP filing in Xero includes all year-to-date payroll information.
Does STP cost extra in Xero?
No. STP compliance is part of the Xero product offering.