Are you ready?
Single Touch Payroll (STP) was introduced on 1st July 2018 for all businesses with 20 or more staff (substantial employers). The Bill to extend the Single Touch Payroll (STP) reporting requirements so they apply to all employers, regardless of the number of employees has now passed the Senate and will be Law.
This means STP is set to be rolled out in stages to smaller organisations with less than 20 employees as at 1 July 2019.
What do you need to know?
STP will require you to have your payroll transaction data transferred to the ATO each time your employees are paid. This may require you to use a software solution that will transmit the data to and from the ATO on your behalf.
This payroll or reporting system must be STP compliant so that each pay cycle you can report the following items to the ATO:
- each employee’s name and tax file number (TFN);
- gross amount paid;
- tax withheld on the gross;
- ordinary time earnings for the period; and
- any superannuation guarantee obligations.
The ATO will then report to you each month or quarter, the correct amount of PAYG tax withheld to pay in your activity statement. Also, each quarter there will be information available regarding your superannuation obligations to either pay the ATO clearing house or your independent provider.
If your system is already automated with reports that can provide the information listed above for every pay cycle, all you need to do is confirm if your product is STP compliant.
However, if your system is still manual it is now time to discuss and review your internal processes. The STP regime is mandatory for employers of more than 20 staff from 1 July 2018, and will be mandatory for all employers by 1 July 2019.
LBW Business & Wealth Advisors advice is to become STP ready to avoid any fines or penalties in the future from the ATO. Should you require any assistance or advice in becoming STP ready, please do not hesitate to contact them on 03 5221 6111 or click here.
Thanks to LBW Business & Wealth Advisors for providing us with all the facts!