Single Touch Payroll reporting to the ATO has begun for employers with more that 20 regular employees
What is Single Touch Payroll (STP)?
Single Touch Payroll is an important ATO reporting change for employers.
It means employers will report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO directly from their payroll solution at the same time they pay their employees.
As a result:
- we will no longer need to submit payment summary annual reports to the ATO
Because you’ll be updating the ATO on a pay-by-pay basis, you won’t need to prepare a payment summary annual report anymore. You’ll just let the ATO know when you’ve made your last pay run of the financial year for your employees.
- No more employee payment summaries, either
Payment summaries won’t need to be sent to employees anymore, so employers won’t be required to produce them. The ATO will use single touch payroll reports as the sole record of salary/wages paid, taxes collected, and superannuation contributed.
When does this start?
If your organisation paid 20 or more employees as at March/April 2018 you will need to start reporting STP from 1st Jul, 2018 from your payroll system.
The remaining employers will begin to report STP from 1st Jul, 2019
Employers paying 20 or more employees using Xero Accounting software have an automatic extension to submit until 31st December, 2018
Xero and STP Reporting
Xero is progressively rolling out the STP functionality in it’s payroll function.
You will see the following box at the top of your Payruns screen when the functionality is ready in your Xero organisation.
Learning about STP in Xero
- This will show how to set up STP
- How to file your payrun information with the ATO
When you have viewed the above video and are ready to start STP click on the Opt In button and start the set up process.
Click here for a quick overview video
Here are some answers to some FAQ’s
How will Xero roll out STP to employers?
Xero is ready for Single Touch Payroll! Our STP solution is simple and beautiful and has been endorsed for use by the ATO. It is available to businesses with 20 or more employees, as part of a broader legislative move toward the digitisation of business.
What about the ATO’s 1 July deadline to begin using STP?
The ATO has granted Xero subscribers a deferral until as late as 31 December 2018. Should you wish to wait, you can continue processing payroll as normal until that date and remain fully ATO compliant without any penalty. The choice is yours – but rest assured, set up is simple.
Do I need to contact the ATO about the deferral?
No. The deferral is automatic for Xero Payroll users. There’s no need to apply for it nor contact the ATO to inform them about it. Xero users can use the ATO reference number 49410109 should anyone ask.
What if I have fewer than 20 employees?
If you have fewer than 20 employees, you’re not yet required to use STP so there’s nothing you need to do. When STP does become available for your business, we’ll let you know via a banner on the pay-run screen. At that point, you can start filing seamlessly with the ATO.
If I begin using STP anytime after 1 July, do I have to play catch-up in reporting to the ATO?
No. Each STP filing includes all year-to-date payroll information. This feature, along with the ATO deferral, will make for a smooth experience when you begin using STP.
Does STP cost extra in Xero?
No. STP compliance is part of the Xero product offering.
Will STP change my current payroll workflow in Xero?
STP in Xero is simple. Once set up, it adds just two clicks to your workflow.
Please contact us to discuss this article further or you need any help with your church’s financial management processes at [email protected] or 1300 138 627
© Benkorp Management Services Pty Ltd 2018