The Australian Taxation Office requires businesses in Australia to submit their payroll information through the new single touch payroll system. Under this new payroll regime, you are continually required to submit your payroll details, including salaries and wages, each period. The program has been in place for all employers since July 1st of 2019. If you are not yet on board, it is important to get started now.
The fundamentals of the single touch payroll system remain the same for all employers. But there are some important differences and nuances that business owners need to be aware of. Take some time to explore how the STP system works, and you will not have to worry about compliance issues in the future.
Let’s look at some of the fundamentals behind single touch payroll, what it is and how it works.
The Basics Of Single Touch Payroll
Under the STP system, employers need to submit salaries, wages, pay as you go payments, and superannuation information for every employee. This submission needs to take place every pay period, though this will differ between employers depending on how frequently you choose to pay your employees.
The most efficient way to handle all STP information is to use payroll software that has been configured to comply with the new system. With the right software, you can submit your payroll information directly to the Australian Taxation Office. If your current payroll software provider does not provide STP compatibility, and if you are an Australian employer, then you need to find a software package that does.
Alternatively, employers can submit their STP information through a third party. Smaller employers, with one to four employees, can also opt to submit their data through a “no-cost or low-cost solution.”
While the program has been mandatory for almost all employers in the country since July of last year, you may not have enrolled yet because you had previously filed a request for more time. Deferrals have been and can be granted based on the need to have more time to start reporting under the STP system. This could be because you cannot find suitable software or if your business processes are more complex than average and require a bit of customisation to fit STP procedures. Deferrals can also be requested for submitting individual payroll reports.
Benefits Of Single Touch Payroll
With the single touch payroll system, your employees can easily access their year-to-date payroll information from the Australian Taxation Office’s website. This includes superannuation and pay-as-you-go reporting. Employers are also no longer required to create and distribute annual payment summaries for their employees. Instead, income statements and employee tax information can be accessed via the ATO.
The single touch payroll system is part of a larger initiative to digitise the Australian public service. This will provide the ATO and other government agencies with up to date information. With better data, policies and regulations can be more responsive to national needs.
Important To Remember
Finally, there are some frequently raised points that you need to know about the STP. For example, there is no need to adjust your payroll frequency when you are transitioning to the new system. You can continue to pay your employees with the same regularity that you have always used. Additionally, there is no need to submit payroll information in a given report for employees who did not have any earnings during a given pay period.
Shift Into Single Touch Payroll
This information will help you get started with switching to single touch payroll. Upgrade your payroll software or request a deferral for more time as soon as possible.