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What is STP – Single Touch Payroll?

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24 May

What is STP – Single Touch Payroll?

Single Touch Payroll

Single Touch Payroll in Adelaide

(STP) Single Touch Payroll is an initiative being introduced by the Australian Tax Office (ATO) to provide real time visibility over the accuracy and timeliness of organisations’ payroll processes. STP proposes to streamline the administration of employee payroll, tax and superannuation obligations for employers.

What is STP?

The ‘Budget Savings (Omnibus) Bill 2016 – Single Touch Payroll reporting was introduced into Parliament on 31 August 2016 and received Royal Assent on 16 September 2016. STP will enable employers to report salary or wages, pay as you go (PAYG) withholding and super information directly to the ATO at the same time they pay their employees.

Who does it apply to?

It applies to all employers with 20 employees or more based on a headcount as at 1 July 2018. Employers with fewer employees can still report voluntarily, although this is not a requirement until 1 July 2019.

Single Touch Payroll by Affordable Quality Bookkeeping Adelaide

When does STP start?

It is proposed that STP will commence from July 2018. Employers will need to do a headcount on 1 April 2018 to determine their requirement to report through STP; organisations of 20 or more employees will be required to start transmitting from July 2018.

So why the change and what are the benefits of Single Touch Payroll to all us?

Well, primarily, the move signifies an effort by the ATO to make the Australian tax system smarter, more automated and more efficient.

Single Touch Payroll Employer Benefits

For employers like you, once the changes are understood and applied, there are several advantages under the new system:

Single Touch Payroll by Affordable Quality Bookkeepers

Firstly, once STP is fully online, you will no longer need to provide annual pay (PAYG) summaries to employees. You won’t need to perform the annual reconciliation to the ATO commissioner. This will reduce your administration and compliance overhead.

The STP data that you provide will allow the ATO to pre-fill the BAS PAYG amount, maintaining that element accurately on your behalf.

In essence, you can allow the natural business processes of paying employees, to help you meet the PAYG withholding reporting obligation. You can be more confident that you are meeting your obligations.

Single Touch Payroll Employee Benefits

For employees, in terms of visibility of pay, tax and super, life just got easier.

The ATO’s myGov portal will be updated with an employee’s total year to date salary. It will display PAYG withholding amounts and super guarantee contributions as they accumulate. This means that, via their myGov account, employees will have access to more information in a more timely manner. Furthermore, new employees can complete TFN Declarations and Super Choice nominations online for a more streamlined digital process

In terms of the ATO, we live in the age of “big data”, as a result,  the ATO is predicted to receive 100’s of millions of pay events per annum. All via the STP gateway, therefore, this massive data set will have far greater relevancy and currency than ever before. One of the main benefits is to assist the ATO in monitoring employers struggling to meet their PAYG withholding and super obligations and to implement early intervention processes for those falling behind.

Download Our Complimentary Ebook on STP/Single Touch Payroll to find out more:

Single Touch Payroll EBook

If you have a question regarding this change in Payroll, please give AQ Bookkeeping a call and we can explain to you in more detail! 
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