What is Single Touch Payroll?

You may have heard the term 'Single Touch Payroll' lately and have been wondering what all the fuss is about. And, if you are the owner of a business, it is very important to ensure that you are aware of what it is! Single Touch Payroll is an approach that is being overseen by the ATO, and you need to be aware of how it alters your employer responsibilities when it comes to tax and super information of your employees.

If you are finding the below a little overwhelming, or would like to discuss Single Touch Payroll with a professional, give Bottom Line Control Sunshine Coast accountants a call on (07) 5471 7077 and we can discuss theoptions available to you.

What is Single Touch Payroll?

Single Touch Payroll, or STP, is a way to report tax and superannuation information to the ATO. It is available through most payroll, accounting and business management software, however head to the ATO Single Touch Payroll website for more information.

How does Single Touch Payroll work?

The way that STP works is quite simple - when you run your payroll, your payroll or accounting software sends both tax and super information to the ATO. There are 3 ways in which STP is offered to be sent :

• An 'end-to-end solution', which allows you to run your payroll and send the STP information directly to us from your software.
• A solution which allows you to run your payroll and send the STP information through a third party sending service provider (SSP) which is integrated into your software.
• A solution that allows you to run your payroll and requires you to send the STP information through a third party sending service provider (SSP) outside your software.

The ATO will then match the relevant information provided to their employee and employer records.

Is Single Touch Payroll compulsory?

Yes, it is compulsory from 1 July 2019, unless you have applied for a deferment or an exemption.

Who should be reporting through Single Touch Payroll?

Micro employers (with 1-4 employees)

If you are an employer with 1-4 employees, and you do not use STP software, there are other options available other than software to report from 1 July 2019. These include low cost or no cost STP solutions, or you also have the option for your registered tax or BAS agent to report your STP information quarterly, rather than each time you run payroll (this option will be available until 30 June 2021). Have a chat to your tax agent for more information.

Small Employers (with 5-19 employees)

If you are an employer that has 5-19 employees, you have a few options when it comes to using STP:

• If your current payroll software offers STP, then you can update your product and start reporting from 1 July 2019. It is best to have a chat with your software provider before you do anything, to ensure any integration occurs properly.
• Start reporting before 30 September 2019.
• Apply for more time to get ready for STP.
• Ask for an exemption, if you are located in an area with intermittent to no internet.

Take a look at the ATO's About Single Touch Payroll for some more information

Employers with 20 or more employees

If you are an employer with 20 or more employees, STP commenced on 1 July 2018, so you should already be using it or have had a deferral accepted to commence at a later date. Speak to your tax professional regarding any issues or concerns you may have, or whether your software is STP-compatible.

How to report with Single Touch Payroll

There are four ways that you can send STP data to the ATO:

• Option 1: Report through your existing payroll or accounting software
• Option 2: Choose STP enabled payroll software
• Option 3: Ask a third party to report on your behalf
• Option 4: Choose an alternate solution once it is available (for employers with less than four employees)

Speak to your local accounting specialist regarding which option is best for you, or check out the ATO website for more information.

Your local and qualified accounting specialists

If you have any further questions regarding Single Touch Payroll or any other accounting needs you or your business may have, give Bottom Line Control a call on (07) 5471 7077 today. We are friendly accounting professional with years of industry experience, so get in contact now!

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Resources:

ATO (Single Touch Payroll): https://www.ato.gov.au/Business/Single-Touch-Payroll/

ATO (About Single Touch Payroll): https://www.ato.gov.au/Business/Single-Touch-Payroll/About-Single-Touch-Payroll/

Xero (What is single touch payroll and how till it affect your business?): https://www.xero.com/au/resources/small-business-guides/payroll/single-touch-payroll/

Xero (Single Touch Payroll): https://www.xero.com/au/resources/single-touch-payroll/

The Sydney Morning Herald ('Get on board': Single touch payroll required for all employers): https://www.smh.com.au/business/small-business/get-on-board-single-touch-payroll-required-for-all-employers-20190212-p50x73.html