Single Touch Payroll (STP) changes the way employers report their employees’ tax and super information to the ATO.
Using payroll or accounting software that offers STP, employers send their employees’ tax and super information to the ATO each time they run their payroll and pay their employees.
The result is that employers won’t need to complete payment summaries for their employees at the end of each financial year, as the payroll information would have been reported to the ATO at regular intervals throughout the year.
The payroll information is sent to the ATO either directly from the software or through a third party, such as a sending service provider.
STP reporting started gradually on 1 July 2018 for substantial employers (those with 20 or more employees).
Parliament has passed legislation to extend STP reporting to all employers from 1 July 2019. The Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 is yet to receive Royal Assent.
Different STP reporting options will be available by 1 July 2019 to help smaller employers. However, the ATO won’t force employers with 19 or less employees to purchase payroll software if they don’t currently use it.
The ATO has asked software developers to build low-cost STP solutions at or below $10 per month for micro employers – including simple payroll software, mobile phone apps and portals.
Micro employers (1–4 employees) will also have a number of alternative options that are not available to employers with 20 or more employees – such as initially allowing your registered tax or BAS agent to report quarterly, rather than each time you run your payroll.
