Single Touch Payroll (STP)
Updated: 30/06/2022
As you should now be aware, the ATO have introduced a mandatory payroll reporting system: Single Touch Payroll (STP). All employers, including those with closely held employees, need to be using STP from 1st July 2021. The ATO has been rolling this new system to employers over the last three years.
From 1st July 2021: all employees no exceptions unless special circumstances.
From 1st July 2019: employers with under 20 employees, with the exception of micro-employers (<4) and closely held employees
From 1st July 2018: employers with over 20 employees.
STP is designed to make more info available on myGov for employees so they can check their payroll data throughout the year and automatically for their tax all while allowing the ATO to keep a closer eye on employers to ensure PAYGW and Super are being reported and paid on time for employees. Here's a user-friendly video that explains the purpose behind STP: https://fast.wistia.com/embed/medias/sxkw32jgny
Find out more! Which section is relevant to you? Remember to reach out to us at any time for further assist.
For Employees
If you’re an employee, download this Fact Sheet for more info on STP and how it works: https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/information%20for%20employees.pdf
The beauty of STP for you is not only will you be able to see your end-of-year tax and super information on myGov for tax time but you’ll be able to see your year-to-date information as the financial year progresses so you can keep an eye on your income, tax and super information.
Don’t have a myGov account yet? Set one up here: https://www.humanservices.gov.au/individuals/online-help/create-mygov-account
Ultimately, you’ll no longer receive a Payment Summary at EOFY from your employer to complete your tax return and instead your payroll information will be available on myGov within your end-of-year “Income Statement”. Your accountant will also have access to this information as well.
When this will kick in:
Best to check with your employer when they started reporting under STP as this will only kick in for you once your employer turns on their STP.
You should have already received an Income Statement in this or the last few years sent sent to your myGov inbox, rather than receiving a Payment Summary from your employer.
If you don’t have many co-workers at all (less than three), you may need to wait another year or so before they turn on their STP so hang out for your Payment Summary after EOFY.
Talk to your employer if you’re unsure or ask us for help.
As your accountant, we’ll already have electronic access to your end-of-year payroll information for your tax return regardless of STP so not to worry there, we’ve got you covered.
The ATO’s direct explanation on what STP means for you: https://www.ato.gov.au/Business/Single-Touch-Payroll/Single-Touch-Payroll-for-employees/What-Single-Touch-Payroll-means-for-employees/
myGov:
For more information on how the ATO works with your myGov account: https://www.ato.gov.au/general/online-services/in-detail/mygov/ato-and-the-mygov-inbox/
Income Statement (the new Payment Summary):
Information on how to access your end-of-year and year-to-date “Income Statement” online: https://www.ato.gov.au/Business/Single-Touch-Payroll/Single-Touch-Payroll-for-employees/Accessing-your-income-statement-or-payment-summary-online/
For Employers
The ATO’s soft-transition period for employers is over. As an employer, you are required to use your software to electronically report your employees' payroll data each pay cycle to, i.e. each time your employee is paid, as well as complete a Finalisation Declaration at each EOFY instead of providing a Payment Summary to your employees as they’ll automatically receive their payroll information for their tax in their myGov account as an “Income Statement”.
We are here to help make reporting with STP as painless as possible and offer compliant STP services from bringing your software up to date and STP-ready all the way to processing your payroll each pay run for you. If you’re already a client of ours, we’ll have already been in touch with you to ensure your business is STP ready.
See below Software Links for software options if you don’t already have software to process your payroll.
The ATO's direct explanation on STP and what is required from you as an employer: https://www.ato.gov.au/Business/Single-Touch-Payroll/
Software
Xero: https://www.xero.com/au/campaigns/single-touch-payroll/
Quickbooks: https://quickbooks.intuit.com/au/payroll/single-touch-payroll/
Low-Cost Solutions: https://www.ato.gov.au/business/single-touch-payroll/in-detail/low-cost-single-touch-payroll-solutions/?=redirected_STPsolutions
Free Option: https://www.freeaccountingsoftware.com.au/single_touch_payroll
Please make contact us with to find out more about how this all affects you as an employee or as an employer.
EOFY Finalisation
At the end of each financial year, the payroll data needs to be “finalised”. This process confirms the data is correct and allows the employees to receive accurate income statements to their myGov and reconciles the ATO’s information so they can complete their individual tax return.
The due date this must be completed by is 14th July.
Software links below to assist you in the finalisation process for your employees or take advantage of our service for this.