All information in this article, which pertains to the ATO’s Single Touch Payroll obligation, was sourced from the Australian Taxation Office and payroll software providers. Deloitte Private has published this information in its Help Centre to assist you with STP and have not verified or tested its accuracy.
How does STP benefit employers?
The main benefit for employers with Single Touch Payroll is that it should streamline the payroll reporting process by sending payroll information to the ATO at the same time as employees are paid, either weekly, fortnightly or monthly, via their payroll software. This means pay runs and payroll compliance are combined into one process.
- Payroll reporting will be combined with your pay run process, giving you the opportunity to streamline reporting and gain valuable time around financial year end.
- The ATO will pre-fill payroll fields W1 & W2 in your BAS, eliminating potential errors and double handling.
- You may no longer be required to generate and distribute payment summaries to employees as this information will be available online via myGov.
- On-board new employees quickly with online commencement forms including Tax File Number Declaration and Super Choice.
To enable this direct submission to the ATO your payroll software needs to be updated. Refer to the Help Centre article specific to your payroll software provider.
How does STP benefit employees?
- Get real-time access to payments and contributions via myGov including superannuation, income and tax.
- Your payroll information will pre-fill in your tax return, making it easier and quicker to complete as you won’t need to wait for a payment summary from your employer.
- Electronic commencement forms including a pre-filled Tax File Number Declaration and Super-Choice form makes starting a new job easier.
How will this impact my payroll?
In essence, nothing will change in how you process payroll. The main thing is that after each “payroll event” you will have to send some additional reporting information to the ATO. The obligation is on the employer to send information to the ATO – not the software provider. Although this process should be seamless, you (or your registered agent) will need to provide the authorisation to report this information to the ATO each pay day through your software. So, if your software provider doesn’t support Single Touch Payroll by July 1 2018 and you employ 20 or more employees, you may need to convert to an STP enabled solution.