From 1 July 2019 small employers (with less than 20 employees) are required to report to the ATO using Single Touch Payroll (STP) software at the time they process their payroll. STP is a way of sending employees’ tax and superannuation information to the ATO.
Large employers (with 20 or more employees) commenced STP from 1 July 2018. The new law will extend STP to all employers and will help ensure Australians receive their full superannuation entitlements and that PAYG (Withholding Tax). Other benefits of STP are greater transparency, faster streamlining business reporting and the ATO being better informed whether employers are complying with their PAYG(W) and superannuation guarantee obligations.
By reporting through STP, employers need not complete payment summaries at the end of the financial year, because payment summaries will be available to employees through MyGov.
Implementing STP and lodging reports may take some time for small employers and the ATO will assist by:
Employers may need to choose new payroll software if their current software does not offer STP reporting. The ATO recommends employers speak with their registered tax agent/accountant to establish which product best suits employers’ needs.
The ATO requested 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. A register of suppliers who intend to build these solutions is available at Low-cost STP solutions on the ATO’s website. Currently 31 software companies offer low-cost STP solutions which are time efficient to complete the STP report for each pay period and which will not require the employer to maintain the software.
For assistance with payroll, tax and superannuation obligations, please contact your Nexia Edwards Marshall Adviser.
The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.