SINGLE TOUCH PAYROLL
Single Touch Payroll (STP) reporting is currently available through payroll, accounting and business management software. Most software providers are offering STP-enabled products. Some providers have asked us for a later start date (a deferral) for their employer clients to report through STP. If you're not sure whether your software has a deferral, check with your provider.
A number of No-cost and low-cost Single Touch Payroll solutions (less than $10 per month) will be available in the 2018-19 financial year for micro employers (four or less employees).
How STP works
STP works by sending tax and super information from your payroll or accounting software to the ATO as you run your payroll.
When you start reporting:
- you will run your payroll, pay your employees as normal, and give them a payslip
- your pay cycle does not need to change (you can continue to pay your employees weekly, fortnightly or monthly)
- your STP-enabled payroll software will send us a report which includes the information we need from you, such as salaries and wages, pay as you go (PAYG) withholding and super information
- see our employer reporting guidelines for a full list of payments that must be reported through STP.
You will be reporting super liability information through STP for the first time. Super funds will also be reporting to us. They'll let us know when you make the payment to your employees' chosen or default fund. This is an important step toward making sure employees are paid their correct entitlements.
The way STP information is sent will depend on the software you use. STP reporting will be offered in one of the following ways with:
- an end-to-end solution, which allows you to run your payroll and send the STP information directly to us from your software
- a solution which allows you to run your payroll and send the STP information through a third party sending service provider (SSP) which is integrated into your software
- a solution that allows you to run your payroll and requires you to send the STP information through a third party sending service provider (SSP) outside your software.
ATO systems will match the STP information to our employer and employee records.
Your employees will be able to see their year-to-date tax and super information in ATO online services, which can only be accessed through myGov. Their data is updated every time you report (each pay day for most employers). Without STP reporting, employee data is only reported at the end of the financial year.
If you make mistakes in your STP report, you can correct it in your following report. We won't penalise you for making mistakes you correct.
At the end of the financial year, you'll need to finalise your STP data. This is a declaration to the Commissioner to state you have completed your reporting for the financial year.
You will no longer have to give your employees a payment summary for the information you've reported and finalised through STP. Once you finalise your data, your employees or their registered agent will be able to lodge their income tax return using the STP information available in ATO online/
You will no longer need to provide us with a payment summary annual report (PSAR) at the end of the financial year for the payments you report through STP.
HOW TO REPORT
Option one: Report through existing payroll or accounting solution
You can report from your existing payroll or accounting software if STP reporting is available.
- Talk to your software provider to find out how they offer STP and what you need to do to update your product.
- Find out how to Get ready for Single Touch Payroll.
Option two: Choose STP enabled payroll software
You may need to choose payroll software if you do not currently use it or your current software provider is not offering an STP-enabled product.
Some providers are not updating their older products, such as those purchased off-the-shelf.
If you have four or less employees, and you do not need payroll software, you can use an alternate solution (see option four).
- Talk to your registered tax or BAS agent to find out which payroll software product would best suit your business needs.
Option three: Ask a third party to report on your behalf
You can ask a third party, such as a registered agent or payroll service provider, to report on your behalf.
It is your obligation as an employer to make sure they will be reporting through STP.
If you use a registered tax or BAS agent, talk to them about your options. They may be able to report through STP for you, or work with you to outsource your payroll to a payroll service provider.
Payroll service providers must be registered as a tax or BAS agent when providing a tax agent service or BAS service for a fee. This would include Single Touch Payroll.
Option four: Choose an alternate solution once it is available (for employers with less than four employees)
We have asked software developers to build No-cost and low-cost Single Touch Payroll solutions at or below $10 per month for employers with less than four employees.