Deadline for Single Touch Payroll transition extended for small businesses
The Single Touch Payroll (STP) for small business commences on 1st July 2019, however the ATO have extended the deadline to September 2019 to allow for the transition as they understand the impost this has on small business.
The Australian Tax Office is urging small businesses to think about STP, how they will adapt and when they will start the change. Single Touch Payroll is happening and small businesses need to start preparing for it.
How STP works
STP works by sending tax and super information from your payroll or accounting software to the ATO as you run your payroll.
When you start reporting:
you will run your payroll, pay your employees as normal, and give them a payslip
your pay cycle does not need to change (you can continue to pay your employees weekly, fortnightly or monthly)
your STP-enabled payroll software will send the ATO a report which includes the information they need from you, such as salaries and wages, pay as you go (PAYG) withholding and super information
see the ATO employer reporting guidelines for a full list of payments that must be reported through STP.
You will be reporting super liability information through STP for the first time. Super funds will also be reporting to the ATO. They'll let the ATO know when you make the payment to your employees' chosen or default fund. This is an important step toward making sure employees are paid their correct entitlements.
The way STP information is sent will depend on the software you use. STP reporting will be offered in one of the following ways with:
an end-to-end solution, which allows you to run your payroll and send the STP information directly to the ATO from your software
a solution which allows you to run your payroll and send the STP information through a third party sending service provider (SSP) which is integrated into your software
a solution that allows you to run your payroll and requires you to send the STP information through a third party sending service provider (SSP) outside your software.
ATO systems will match the STP information to their employer and employee records.
Your employees will be able to see their year-to-date tax and super information in ATO online services, which can only be accessed through myGov. Their data is updated every time you report (each pay day for most employers). Without STP reporting, employee data is only reported at the end of the financial year.
If you believe that your business will not be ready to start reporting through STP by 30 September 2019, you can contact the ATO to discuss putting a deferral in place.