Single touch payroll is an Australian Government incentive, designed to reduce the burden of reporting to government agencies. Employers are relieved of producing payment summaries and employees can find the information in their My Gov account.
Since July 2018, STP has progressively been rolled out to every employer in Australia. Small employers (less than 19 employees) were exempt from reporting amounts paid to closely held employees until 30 June 2021. Now all employees need to be reported through STP.
A closely held employee is someone directly related to the entity who they receive payments from. For example, directors or shareholders of companies, family members of a family business or beneficiaries of a trust.
Closely held employees can be reported on:
- Actual payments on or before payday
- Actual payments on a quarterly basis
- Estimated payments on a quarterly basis.
All other employees must be reported on actual payments on or before payday.
Currently STP reports Year-to-date amounts of gross payments, Reportable employer superannuation contributions, Super Guarantee, some allowances, lump sums, tax withheld and reportable fringe benefit amount.
From 01 January 2022 STP is being expanded to include all allowances, bonus’ and commissions, director’s fees, overtime, paid leave and salary sacrifice.
Who can submit STP?
As STP is an approved form submitted to the commissioner of Taxation, it needs to be submitted by the business owner or a registered BAS or Tax agent.
An STP Authority form must be signed giving the registered agent authority to submit. The ATO have streamlined this authority to a yearly STP Engagement Authority that needs to be renewed every 12 months. In addition to the annual standing authority, a finalisation authority will need to be signed to finalise the STP at the end of the financial year.
Payroll software providers work closely with the ATO to have their systems aligned with legislation for STP reporting, however a manual check of figures and matching of the STP reports to the financial reports is necessary.
Although the ATO express the view that STP Simplifies ATO reporting, the very nature of the Australian Taxation system is a complex one. A registered BAS or Tax agent will ensure your obligations are up to date and minimise the risk of a payroll audit.
If you need more information about STP, call your tax professional or Sharbara Accounting Services can help you.
