Single Touch Payroll (STP) starts from 1 July 2019 for all employers with 19 or less employees. Employers with 20 or more employees needed to start reporting from 1 July 2018, unless covered by a deferral.
STP is a change to the way you report your employees’ tax and super information to the Australian Taxation Office (ATO). Every time you pay your employees you’ll need to report their salary and wage, PAYG withholding and super information through STP-ready software.
You can start reporting anytime from 1 July to 30 September 2019. If you need more time to get ready, please contact our office as soon as possible to arrange a request for a later start date with the ATO.
How to start reporting through STP?
If you have employees, you are now required to use STP-ready software to lodge your employee payroll information before or on the day you make a payment. We recommend using MYOB or Xero for this, however there are other alternatives available for micro businesses (1-4 employees), and other specialist payroll software that is STP-ready.
If you haven’t already transitioned to using STP-ready software, please contact our office as soon as possible to discuss your options.
Payment summary relief for employers who opt in before 1 July 2019
We suggest you opt into STP and process a pay run with a payment date before 30 June 2019 to avoid preparing payment summaries for the 2019 financial year.
When you file the payroll information through STP, the ATO only looks at the year to date figures. Therefore, by lodging the last payroll file for the 2019 financial year, the ATO has all the employee payroll information they require. This was previously reported in a payment summary annual report (PSAR).
Employees will now be able to view their payroll information in real time via their myGov account. If employees do not already have a myGov account, or do not intend to set one up, they will need to call the ATO to request this information.
After the end of a financial year, the ATO will produce an ‘income statement’ which is the equivalent of a payment summary (which some people call a group certificate).
If you don’t opt in to STP before 30 June 2019, you are required to prepare employee payment summaries and a payment summary annual report to the ATO as usual. This will be the last year you are able to provide payroll information this way.
Notifying Employees of changes
Let your employees know when you are opting into STP. If you are opting into STP before 30 June 2019, advise your employees that no payment summary will be provided this financial year, and provide information on how they can obtain their payroll information going forward.
Please click here to download the ATO’s Single Touch Payroll for employees’ factsheet and distribute to your employees.
Closely Held Employees – Deferral start date of 1 July 2020
Closely held employees fall under the following categories:
- Family member of a business
- Director or shareholder of a company
- Beneficiary of a trust
From 1 July 2020 you will have the option to report closely held payee’ information quarterly.
Reasonable estimates should be made each quarter and methods to calculate these amounts are as follows:
- withdrawals taken by the payee (but do not include payments of dividends or payments which reduce liabilities owed by the business to the closely held payee)
- calculating 25% of the total salary or Director fees from the previous year
- vary the previous years’ amount (to take into account trading conditions) within 15% of the total salary or Directors fees for the current financial year.
These methods are similar to the way you would calculate pay as you go (PAYG) instalments. If you choose to report closely held payees quarterly you will have up to the due date of your income tax return to finalise the information you have reported for the year and make any adjustments.
If you are a closely held employee, but are usually paid during a normal pay cycle, please continue to report your payroll information as per normal (through STP-ready software).
Please continue to report closely held employees information as usual until 1 July 2020. We will update this topic when further information becomes available from the ATO.
Still have questions
We are here to help you transition to Single Touch Payroll reporting.
Please contact our office on 07 3831 1055 or email [email protected] to discuss how we can assist you further.
DISCLAIMER: The information on this website and the links provided are for general information only and should not be taken as constituting professional advice from Hall Browns Accountants. You should consider seeking the appropriate legal, financial, or taxation advice to check how the website information relates to your unique circumstances.