Single Touch Payroll

Payroll-2.jpg

Single Touch Payroll is a change to the way employers report their employees' tax and super information to ATO.

Using payroll or accounting software that offers STP, employers send their employees' tax and super information to ATO each time they run their payroll and pay their employees. The information is sent to ATO either directly from the software, or through a third party – such as a sending service provider.

Software providers can tell you more about how they offer STP reporting.

Employers with 20 or more employees

STP reporting started gradually on 1 July 2018 for substantial employers (those with 20 or more employees).

If you have not started reporting through STP, we have information to help you get ready. If you need more time, you can apply for a deferral.

Find out if your software is STP-ready by talking to your software provider. Your tax professional can also help.

Employers with 19 or less employees

Legislation to extend Single Touch Payroll to include employers with 19 or less employees is currently before parliament.

For now, you can choose to report through STP. Talk to your software provider to find out what you need to do to update your software and start reporting.

ATO won't force employers with 19 or less employees to purchase payroll software if they don’t currently use it. Different STP reporting options will be available by 1 July 2019 to help smaller employers.

Single Touch Payroll authorisations

The ATO has allowed clients to authorise their registered agent to act on their behalf for Single Touch Payroll (STP).

On 1 July 2018, the Australian Government introduced STP for employers with 20 or

more employees. The new scheme requires employers to report payment activities each

time employees are paid. The STP engagement authority allows employers to provide the

Commissioner of Taxation with the relevant form once a year instead of at every pay event by

using a registered agent.

STP engagement authority

A registered agent that reports through STP for an employer can get written authorisation to make this declaration through an annual agreement. This authorisation allows the registered agent to make the relevant declaration to the Commissioner when they lodge an STP at each pay event. Both parties should have a copy for their records although there is no need to provide a copy to the ATO.

The agreement should include the following terms:

•An outline of the responsibilities of both parties

•Agreed terms of the employer’s collation of payroll

•Their process for calculating and paying their employees

•Taxation and superannuation obligations

Employer’s eligibility

To be eligible for the STP engagement authority the employer must not:

•Have any overdue activity statement lodgements

•Have any outstanding debts, unless they are covered by a payment arrangement or

subject to review

•Currently be or have been the subject of the ATO compliance activity for PAYG withholding in the last two years

Exclusions

The STP engagement authority does not apply to other approved forms or the finalisation declaration. A registered agent must still get a signed declaration in writing from an employer before making the finalisation declaration on behalf of the employer at the end of the financial year.