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What is single touch payroll?
Parliament has recently passed legislation to extend Single Touch Payroll (STP) reporting to include all small employers (those with fewer than 20 employees) from 1 July 2019. Single Touch Payroll enables employers to electronically file information such as wages paid, tax deducted, allowances paid, superannuation etc to the tax office electronically for each pay. Eventually STP will replace the need to prepare and submit annual payment summaries at the end of each financial year. More information from the Australian Taxation Office regarding this change is included at the link below for your information.
ATO information page: https://www.ato.gov.au/business/single-touch-payroll/
When does this change come into effect?
Small employers will be required to lodge information via STP after each pay from 1 July 2019, with a deadline for this transition to be completed by 30 September 2019. There are some concessions for those with between 1 and 4 employees and generous transition arrangements, including deferrals and a quarterly reporting option for two years for micro-employers reporting through an agent. More information on these concessions and transitional requirements for small employers can be found at the ATO link above.
What do I need to do to be ready for this change?
Most mainstream software providers for small businesses, such as MYOB and Xero, have already updated their software to be ready and compliant for this change. You will need to refer to the user guides and website for your respective software provider to understand the implications for your particular situation. We have included the pages for Xero and MYOB for easy reference.
Xero information page: https://www.xero.com/au/campaigns/single-touch-payroll
MYOB information page: https://www.myob.com/au/support/single-touch-payroll