Does your business need to transfer to Single Touch Payroll reporting? Are you wondering which solution is best for you? Take a look at our guide.
Single Touch Payroll: The Ultimate Guide
Since July 2019, all employers in Australia began using Single Touch Payroll, or STP. For employers with 20 or more employees, this will already be familiar, as these larger businesses have already transitioned to STP.
STP is simply a new way to report tax and superannuation details to the Australian Tax Office (ATO). Whether you handle your employee tax on a pay-as-you-go or PAYG basis, or via another method, all information must be submitted in the same way, to ensure that you remain STP compliant.
One of the great things about STP is that it integrates with your payroll software. This makes accurate reporting quick and easy. Despite this, there may be a few things you want to know about before you get started. Take a look at our guide to learn more.
Your Single Touch Payroll checklist
- Authorisation: Before you begin using STP, you need to make sure the method is authorised within your business. If you are the business owner, or are designated as a payroll representative for a business, you are already authorised. If not, this will need to be signed off by the upper management of the business you are reporting for.
- Sending the report: Who will submit your reports? If you are a single part of a group of companies, and your business will take on the task of submitting for another part of this group, you will need to sign an XEA or cross-entity authorisation nomination form. This can be found in the Access Manager section of the ATO portal.
- Connecting to the ATO portal: You can use your payroll software to connect directly with the ATO, using a software ID or a machine credential which will already be installed on your reporting device. Your third-party STP solution provider may also handle the connection themselves.
- Payroll representative: Your business will need someone that the ATO can contact as and when they need to. Nominate this person and then let the ATO know via your software connection, or via the portal.
- Following up: As long as everything is correctly set up, you should have no problems. However, it is wise to follow up with your STP solution provider to make sure everything has been filed correctly.
With all this in place, you are ready to begin reporting.
How to report using STP?
You basically have four options available to you when using STP:
- Reporting via your existing software solution
- Upgrading to a new software solution with STP capabilities
- Use a cheap or free solution to help you report (for companies with four employees or less)
- Report via a third-party agent or provider (for companies with four employees or less)
The rule is, if you have more than four employees on your payroll, you will need to have an STP-enabled software solution registered to your business. This is the case even if you pay someone else to oversee your STP reporting.
There are concessions available to some Australian business. These concessions will affect the frequency of their reports, or the manner of their reporting. Concessions differ between different industries and categories.
If you are defined as one of the following, you may be eligible for concessional reporting.
- Micro employers with four or fewer employees
- Micro employers with four or few employees in the agriculture, forestry, or fishing industries (different concession)
- Micro employers who classify as clubs and associations that are not for profit (different concession)
- Employers without a permanent staff, who only employ seasonally or intermittently throughout the year
- Employers with only family members, directors/shareholders, or trust beneficiaries on the payroll
- Employers with only inbound assignees (personnel employed by entities outside of Australia) on the payroll
If you are in any of the above categories, speak to the ATO to find out what concessions you could be eligible for.
To find out more about handling STP reporting, and to learn how we can help you properly manage your payroll, reach out to our team today.