Back in December 2014 the government announced the introduction of Single Touch Payroll (STP). Below, we have summarised what STP is, why it was introduced, who’s impacted by it and how to implement this new reporting system.
What is STP?
STP is a mechanism for businesses to streamline payroll reporting to the ATO; the tax withheld and superannuation contributions made on behalf of employees as part of the payroll function. This new process for reporting will now be on a pay-cycle basis, not at the end of each tax year via PAYG Payment Summary forms.
Why was STP introduced?
The purpose of STP is to report information in a more timely fashion. The ATO, tax agents and employees will have real time information with regard to taxes withheld and superannuation entitlements through tools such as myGov and the Tax Agents Portal. As well as this, STP allows for a more streamlined and efficient reporting function and prevents end of year surprises for employees and employers.
Who does STP impact and when?
STP impacts all businesses that employ staff. The ATO have staged the process of on-boarding employers onto the STP system as follows:
| Business Size | Start Date |
| Employers with 20 or more employees | 1 July 2018 |
| Employers with 19 or fewer employees | 1 July 2019 |
How to implement STP in your business- Get STP Ready
Implementing and utilising the STP function will involve using computerised accounting packages that have had STP tool built into their payroll modules- updating the payroll software to the latest version available.
There isn’t any registration process as such. It is simply a matter of setting up the relevent details within your accounting/payroll software that then allows for the electronic transmission of data to the ATO. Once the first pay run is done using this process of STP, your business will then be in the STP system.
We will be proactive in contacting our clients that are impacted by STP and will be in touch shortly. If you have any further questions about how this affects your business in the meantime, please contact our office.