Single Touch Payroll (STP) has been around for a few years now. It was introduced back in July 2018 for businesses with 20 or more employees as a means of providing transparency over wages, PAYG tax and superannuation for both the ATO and employees.
Since then, smaller employers have slowly been brought into a system that has been called the biggest change to compliance since the introduction of the GST. Even if not yet compulsory, many of our clients are saying goodbye to the old ATO PAYG Summary Statement paper copies and hello to electronic income statements and instantaneous reporting.
Micro Employers (1-4 employees), seasonal and intermittent employers can choose to report STP quarterly through a BAS or Tax Agent, usually at the same time as the Business Activity Statement is lodged. This concessional reporting is available until 30 June 2021. Applications for concessional treatment should have been lodged via your accountant prior to 28 February 2020, however, applications after this date may be considered depending on individual circumstances.
Key dates for reporting finalised STP:
- 14 July if you employ 20 or more
- 31 July if you employ 19 or less - concessional date for the 2019/20 financial year only
- 30 September for closely held employees only if you employ 20 or more (also applicable if you have 19 or less employees and voluntarily report your closely held employees)
- Lodgement date of the 2020 tax returns (potentially 15 May 2021) if only related employee/s
- Run a July 2019 - June 2020 payroll report within your STP software and your accounting software to ensure the totals for gross wages, PAYG Withholding and superannuation match
- If it doesn’t match investigate why and make the correction, or contact your accountant for assistance
- Google is your friend, there are many step-by-step guides available online to walk you through the finalising process (whichever software you use)
All employers were to be STP ready by 1 July 2020, however, in April the ATO decided to give yet another extension to those employers that only employ related parties (i.e. closely held employees). Depending on your business circumstances, you may not need to be STP compliant until 1 July 2021. Make sure you check this with your accountant if you are unsure, as penalties may apply for non-compliance.
Even if you are not yet required to be registered you may wish to make the change as a time-saving measure in your business. There are both low-cost and no-cost STP solutions, so moving to an online solution doesn’t need to be expensive. There are many benefits to making this change, such as saving manual inputting, physically posting documents and reduction in data entry, transposition or arithmetic errors.
For more information
If you need any further information or have any questions, contact your local RSM adviser. We are here to step you through the multitude of regulations that make up our tax system.