ATO have made Single Touch Payroll (STP) mandatory for all business starting from the 1 July 2019.
We understand that change can be frustrating for some companies and lead to distractions from core business operations. Understanding what STP entails and preparing early through having the correct information and processes will provide a smoother transition for your business.
Benchmark Business Works understands STP, and would like to help by answering some of the most common questions our clients have.
What is Single Touch Payroll (STP)?
Single Touch Payroll (STP) is the next step in streamlining how employers report employees’ earnings, tax and super to the Australian Tax Office (ATO).
Employers are not required to make any changes to their existing payroll process for STP, providing the software is STP ready.
When should employers start lodging pay events through STP?
For companies that employed more than 20 employees as at 1 April 2018, STP commenced 1 July 2018.
For all companies with 19 or less employees,they are obligated to report from 1 July 2019.
What does STP mean for employers?
Employers must report their employees’ earnings, tax and super on a pay event basis. The reporting should take place on or before the employee’s pay date.
Pay date is either the payment date stipulated in the electronic transaction sent to bank, or the date the employer intends to make the payment into the employee’s bank account.
Any payroll mistakes will need to be rectified within 14 days of detection. If employees are paid on a monthly basis, off-cycles would be required to update a payroll event.
STP streamlines businesses’ end of year processes as it not only reports employee’s earnings but also pre-fills employer Business Activity Statement (BAS). Due to this payment summaries or PSAR/empdupe files are no longer required.
What does STP mean for employees?
The way employees get paid won’t be affected by STP. Employees payment will be processed as per normal.
However, employees will no longer receive a printable payment summary. They will be able to access their yearly earnings and super information on their Income Statement in myGov. Employees don’t need to wait until the end of the financial year to see their earnings and super. Companies will be sending the data pay date by pay date. It is real time reporting.
What happens if a company or payroll software isn’t ready?
There will be generous transition arrangements including deferrals and a quarterly reporting option for two years for micro employers reporting through an agent. Micro employers are companies employing 4 or less employees.
There will be no penalties for mistakes, missed or late reports for the first financial year.
However, if you want to get it right first time, contact Benchmark Business Works and we can help you get set up with the best solution for your business.
Are Benchmark Business Works payroll solutions STP compliant?
Benchmark Business Works prides itself on delivery the best business solutions for your unique business. We can help you choose the best software for your situation, and can even process your payroll for you.
What to do if you need help getting started
Benchmark Business Works have been helping Australian businesses become STP compliant since the new rules have been announced. If you want help too, contact us today on (08) 9497 4110 or send us an email at: firstname.lastname@example.org