Single Touch Payroll is a reporting system that companies with 19 or less staff will need to comply with by 1 July 2019. It works by sending remuneration information such as wages, deductions and super from your payroll or accounting software direct to the ATO as you run your payroll. This means businesses using a paper-based reporting system will need to make the digital switch very soon.

There have been some concerns from the small business community about the potential cost of electronic reporting, however the Government has reassured companies within the ‘micro-employers’ category that they ‘will not be forced’ to purchase payroll software.  Businesses with 4 or less staff will still need to comply but alternative solutions including low cost payroll software, phone apps and online portals are available (and being developed).

The roll out of Single Touch Payroll to all employers (businesses over 20+ staff needed to comply by July 2018) ensures that all Australians get their full superannuation entitlements and it gives greater transparency. Previously, employee reporting was completed at the end of the financial year, but now employees will be able to see their year to date tax and super information in ATO online services through myGov, and each time it is reported, their data will be updated. In a move by the Government to help businesses streamline their reporting to the ATO, STP also utilises the technology within accounting software to make the accounting process more efficient.

You will no longer have to:

  • Give employees a payment summary for the information you’ve reported and finalised through Single Touch Payroll
  • Provide the ATO with a payment summary annual report (PSAR) at the end of the financial year

At the end of the financial year, a business just needs to finalise their STP data to state that it is completed. If you have made a mistake, it can be corrected, there are no penalties for mistakes.

The clear message from the Commissioner of Taxation, Chris Jordan in the ATO webcast was;

“Please, people, do not panic, do not be concerned, we will take a very reasonable approach. We expect people to take a while to come on.”

To read his full statement click here 

If you have any questions about STP, please do not hesitate to contact the Taxpro team who can help guide you through the new regulations and the options you have to report. Please call us on 08 9240 7629 or email admin@taxproaustralia.com.au to book an appointment.

Click here for more information about our bookkeeping service.