Single Touch Payroll – STP
Single touch payroll – STP – will be a requirement for all employers, regardless of employee numbers, from 1 July 2019.
PKF in Hobart can help you understand the new requirements and implement a single touch payroll solution for your business.
For some employers, very little needs to be done but others will need to make some important changes to the way they record employee payments.
Under the STP system, each time you pay your employees you will need to report the following information to the Australian Taxation Office (ATO):
- Gross wages
- Deductions and any other payments
- PAYG withholding amounts
- Superannuation information
If all payments are made through STP you will not have to issue PAYG Payment Summaries (formerly known as group certificates) at the end of the year. Your employees will be able to access this information from their myGov account or request the information from the ATO.
From 2020 the ATO will also pre-fill your activity statement labels W1 (Gross wages) and W2 (PAYG withholding) with the information received through the STP system. You will still need to lodge activity statements as you do now.
Different options for Single Touch Payroll depending on what you are doing now
Advice for implementation of a single touch payroll solution for your business will depend on what you are currently doing to record your payroll transactions. Contact PKF in our Hobart office for specific guidance for your business, but we have set out some general guidelines which may be of assistance. You should only act on specific advice we give you.
If your business is currently using Xero payroll:
Xero has implemented STP in its payroll system. To turn the system on you just need to do the following:
1. Click on the “Payroll” menu and select “Pay employees”
2. At the top of the page, there should be an information box with the heading “Changes to the way you report payroll information to the ATO” – press the blue “Get started” button that is included in this box
3. Click “Opt in” to start the setup process
4. Review the organisation details and ensure everything is correct. If anything needs to be updated click “Update Organisation details”, otherwise click “Continue”
5. Xero will display your ABN and SSID which you will need to advise to the ATO. You can do this by calling 1300 852 232
6. Select the checkbox to confirm you have contacted the ATO to connect to your Xero account; then click “Register”
Once STP has been turned on, you will need to submit each payrun you enter to the ATO, this should be done by the wages pay date. You can submit wages to the ATO by doing the following:
1. Process and post your payrun as normal
2. Press the green “File” button at the bottom of the payrun
Please contact PKF in Hobart to set up STP in Xero.
If your business is currently using Xero WITHOUT payroll:
Xero has released a payroll only product that will allow you to process your payroll and report STP information to the ATO for 1 to 4 employees and costs $10 per month.
PKF in Hobart can add this to your current Xero subscription and provide further information on using the STP features included in Xero.
If your business is currently using Reckon:
Reckon has developed a new application called GovConnect STP that you can use to submit your payroll information to the ATO under the STP system.
Information on how to setup GovConnect STP and how it works with your version of Reckon can be found at the following website:
Please contact PKF in Hobart for assistance in setting up STP in Reckon
If your business is currently using MYOB:
MYOB Essentials and MYOB AccountRight are currently STP compliant, you just need to ensure you have upgraded to the latest version available.
Information on how to set up and use the STP solution implemented by MYOB can be found at the following website:
Please contact PKF in Hobart for assistance in setting up STP in MYOB.
MYOB AccountEdge is not currently STP compliant. MYOB has advised that it is currently working with the ATO and you should contact MYOB support for further information regarding this.
If your business is currently using software other than Xero, Reckon or MYOB:
If you are currently using software other than Xero, Reckon or MYOB to process your payroll, you will need to contact your software provider to check if it is STP compliant and how to set it up.
If the software you are currently using is not STP compliant, you will need to change your accounting system. Our recommendation is Xero, which has a range of solutions including a payroll only product. This will allow you to process your payroll and report STP information to the ATO for 1 to 4 employees at a cost of $10 per month.
Please contact PKF in Hobart for advice on your Xero system options
If your business does not use software to process payroll:
If you are using a manual system to process your payroll, it is now time to computerise this function, and the rest of your accounting functions. This will need to happen in order for you to be STP compliant.
We recommend Xero, which has a range of solutions including a payroll only product. This will allow you to process your payroll and report STP information to the ATO for 1 to 4 employees at a cost of $10 per month.
Please contact PKF in Hobart for advice on computerising your business.