Single Touch Payroll is the biggest reporting change in Australia’s history, but many businesses are still in the dark when it comes to the new system.
Through STP, businesses can pay employees while simultaneously reporting to the ATO. Reports occur at every pay run, giving the ATO a direct, digital connection to employers.
While the reporting change is daunting, STP is an opportunity for businesses to explore their HR operations and think about the processes that can be automated with the latest technology.
Key differences between STP and the traditional system include:
- Simultaneous reporting and salary / wage payments.
- A ‘final event indicator’ (FEI) replacing end-of-year payment summaries and PAYGs. FEIs are sent with final pay or at year end.
- Employees to view year-to-date salary wage amounts, PAYG withholdings and employee superannuation contributions through myGov. Because of this, making sure all employees have created a myGov account is crucial.
- Reporting of both employee on-boarding and cessation through payroll events.
STP will be mandatory from 1 July 2018 for all businesses with 20 or more employees. If your payroll provider is not STP compliant, a replacement system could be needed where the provider cannot meet the deadline on 1 July.
To find an STP registered business, visit the ABSIA website and head to ‘product catalogue’. Search for an industry, target market or a specific company to check whether that business is STP compliant.
For businesses with less than 20 employees, STP is not mandatory until 1 July 2019. However, businesses may opt to switch to the STP system before this date.
Since reporting technology, and the reforms that go with it, are wide-sweeping and always changing, foundU recommends that STP is implemented as soon as possible to stay ahead of the game.
For more information on STP, visit the ATO’s Information Portal here.