Single Touch Payroll is changing the way that employers report their employees' tax and super information to the ATO. We have written several articles and held seminars on this topic but the changes are so significant and compulsory that we think that it is worth presenting a summary for each employer category.
With the introduction of STP, employers are expected to report employee information to the ATO using software that is STP ready or through third-party service providers. The main reporting categories include: salaries, ordinary time earnings, allowances and deductions, superannuation liabilities and withholding amounts. Legislation has now passed to include all employers in the STP regime and depending on the number of employees, separate guidelines and due dates apply.
To help employers with transition to STP, the ATO is not pursuing penalties for mistakes, late or missed reports during the first year of implementation. An exemption from reporting can also be provided to employers experiencing hardship or where internet connectivity is an issue.
20 or more employees
The implementation date for businesses with 20 or more employees was 1 July 2018 so you should be reporting through STP or applied for a deferral. If you are unsure of any aspect of STP including your software capability, please talk to us.
15 - 19 employees
You are required to start reporting from 30 September 2019. However, if your payroll software is STP ready, you can start reporting early. If you are considering applying for a deferral or believe you may attract an exemption, please talk to us.
1 - 4 employees
If you have four or less employees and don’t use payroll software, there are other ways to report STP information. The ATO has listed software suppliers who offer no-cost and low-cost STP solutions to help with the transition. There are also some other transitional arrangements that apply to these employers. Please check with us if you are unsure about how they might apply to you.
Closely Held Payees
There are concessional options available for your closely held payees. Closely held payees are those who are directly related to the entity from which they receive payments from. If you have 19 or less employees, you will not need to report closely held payees through STP until 1 July 2020. In addition, you will need to report it quarterly rather than on every payrun. Please talk to us for further information.