Single Touch Payroll (STP) is a new way of reporting tax and super information to the ATO. STP works by sending tax and super information from your payroll or accounting software to the ATO as you run your payroll. Large employers with 20 or more employees were required to use STP from 1 July 2018.
From the 1st July 2019 all business must report their tax and super information to the ATO via a STP payroll/accounting software.
Here is what you need to do:
Check if your software can handle it:
If you are using Xero, MYOB, Reckon, Cashflow Manager check your subscription the STP function may already be included.
If you don’t have any of these accounting software’s and
you employ 4 or less employees our recommendation is to use Xero’s $10 per month standalone payroll software - https://www.xero.com/au/resources/single-touch-payroll/1-4/
you employ 5 or more employees our recommendation is to use Xero as your accounting and payroll software - https://www.xero.com/au/resources/single-touch-payroll/smb/
Once you have chosen your software provider, install the program and set up the payroll system (or get us to help you with it). You will need the employees’ full details – name, address, telephone numbers, emergency contact numbers, tax file number, the date they started working with you, leave balances etc.
Start using the program to run the pays now to become familiar with the process before the 1st July when it becomes mandatory. That way, we can work through any issues before you go live on 1st July 2019. The most difficult bit is installing the add-on and inputting all the employees’ details. Please note some programs will require timesheets if the pay varies with overtime or extra hours worked etc.
The positives from using STP is it will make -
the preparation of Payment Summaries (previously called Group Certificates) easier.
it will work the tax and super out for you.
it will track leave balances in hours for each employee which will avoid any unpleasantness when it comes to taking leave or calculating final pays.
If you have any questions with the above please give us a call.