Small employers, let’s talk about Single Touch Payroll

Small employers, let’s talk about Single Touch Payroll


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The way employers report tax and superannuation information to the ATO has changed.

The way employers report tax and superannuation information to the ATO has changed with the introduction of Single Touch Payroll (STP). John Shepherd, assistant commissioner ATO, explains what this reporting change means for small employers and how they can take the next step and streamline their payroll reporting.

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SINGLE Touch Payroll (STP) is a reporting change that allows employers to send information such as their employees’ salaries and wages, pay as you go withholding and super information to the Australian Taxation Office (ATO) from their payroll solution each time they pay their employees.

Under law employers with 20 or more employees started reporting through STP from July 1, 2018, however it’s not yet mandatory for small employers to do so.

That said, employers with online or cloud-based accounting software can follow the lead of the nearly 45,000 Australian employers successfully reporting with STP, including around 16,000 small employers who have voluntarily adopted STP reporting.

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Small businesses are a critical part the Australian economy, making up over 97 per cent of all 2.2 million Australian businesses*, and we want to ensure they are aware of STP reporting and how they can transition as easily as possible.

The ATO will not force smaller employers to purchase payroll software and there will be a number of other ways to report through STP, including low cost and simple alternate STP reporting solutions.

We have asked software developers about their interest in building low-cost STP solutions at $10 or less per month – including simple payroll software, mobile phone apps and portals.

We will publish a register of the products that we expect to be developed on our website by November 30, 2018.

However, any smaller employer who does use payroll software should talk to their software provider about when their software will be available, so they can start reporting when they are ready.

We recognise this is a big change for employers, so we are focused on educating and supporting tax professionals and employers to make the transition easier.

Payroll data is different to traditional tax data, so we will be taking a low touch approach to compliance until the new system settles in.

STP is also good news for employees. Once employers transition to STP reporting, employees will be able to view their year-to-date tax and super information online via myGov and the ATO will be able to see whether employers are correctly reporting super.

John Shepherd, assistant commissioner, Australian Taxation Office.

John Shepherd, assistant commissioner, Australian Taxation Office.

Over time we expect to give employees a view of what their tax position could be at the end of the year. For example, an employee might have inadvertently claimed the tax-free threshold for two separate jobs, which means they could get a tax bill rather than an expected refund when they lodge their return.

The ATO could alert them of this early in the year in time for them to consider changing their rate of withholding with their employer, which is a service that we couldn’t provide under the old system of once per year payment summaries.

Visit www.ato.gov.au/stp for information, resources, news and detailed guidelines.

*Based on 2017 Australian Bureau of Statistics (ABS) Data

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