It is essential for all business owners to understand the new requirements imposed by single touch payroll (STP) reporting. STP is a new compliance regulation imposed by the ATO (Australian Taxation Office) in relation to the reporting of tax and superannuation information by employers.

On the 1st of July 2018, STP became mandatory for all businesses with 20 or more employees. For all businesses with 19 or fewer employees, it is vital to ensure that you are ready to switch to STP reporting by the mandatory date of the 1st of July 2019.

How STP Works

Many existing business management, accounting and payroll software options are STP-enabled. This simply means that the system has the capability to send taxation and superannuation reports directly from your existing software to the ATO while you run your payroll.

As most leading software products are already STP-enabled, it is incredibly easy to begin the reporting process. You simply run your payroll as normal and ensure that STP reporting is activated on your software. The system will then directly send the ATO the information from your pay run including:

• Salaries
• Wages
• PAYG withholding
• Superannuation contributions

The ATO has provided an easy to read guide to the employer reporting requirements, which includes a full list of all payments that are required to be reported under the STP regulations. It is essential to understand when STP reporting is required in order to remain compliant with your new obligations.

Streamline the STP Process

The most obvious method of streamlining the STP process is to purchase STP-enabled business management software. Most leading business management and accounting software is already SPT-enabled. It is therefore important to speak to your software provider to confirm whether the software is ready to go, requires an update or whether the provider has a deferred start for STP reporting.

If your existing software is not STP-enabled, you can either choose to integrate a third party sending service provider into your software or utilise a third party sending service provider outside of your existing software.

What This Means for your Employees

STP reporting provides greater transparency for your employees in relation to their tax and superannuation contributions. Your employees will be able to see their contributions in real-time, rather than waiting for the end of the financial year when their payment summary is provided.

What This Means for your Business

Business owners are well aware of the stress and work required at the end of a financial year when finalising their financial reporting data. STP reporting streamlines the entire business and financial reporting process in a number of ways. The main benefits of the new reporting system include:

Online Reporting: STP reporting is an entirely online process. This removes the difficulties faced when trying to fill out paper forms at the end of a financial year. Whilst there is still a specific format required to submit your information, STP-enabled software automatically produces the correct legally compliant forms with the required information.

The end of Payment Summary Annual Reports: STP reporting regulations require you to update the ATO with the required payment information on a pay-by-pay basis. This means that you are no longer required to lodge a Payment Summary Annual Report at the end of the financial year.

The end of Employee Payment Summaries: As STP records an employee’s payment summaries on a pay-by-basis, your employees are able to access their year-to-date tax and superannuation data online. This record becomes the role report of all superannuation contributed, tax withheld and salary paid for every employee. This means that you will no longer be required to produce your own payment summary at the end of the year.

The new STP regulations are an important step in bringing business reporting to the Digital Age. STP-enabled software automates and streamlines many of the difficult processes faced by business owners when reporting their payroll activities.

Source: https://www.techguide.com.au/news/computers-news/single-touch-payroll-recent-changes-mean-business/