Single Touch Payroll for small and micro employers

What is STP?

Single Touch Payroll (‘STP’) refers to the framework by which payroll information is reported to the ATO on a ‘real-time’ basis. The main reason for introducing STP was to enable the ATO to identify and address PAYG withholding and Superannuation Guarantee (‘SG’) non-compliance by employers much sooner than previous reporting systems. The employers using STP will benefit from simpler reporting arrangements as well (e.g. relief from having to issue payment summaries).

With STP implemented, employers continue to pay PAYG withholding amounts on their Business Activity Statement (‘BAS’) and SG contributions using SuperStream.

 

What do I need to do to be compliant with the STP?

STP reporting required the use of Standard Business Reporting (‘SBR’) enabled software and a reliable internet connection. For many employers, this means upgrading or changing their payroll software.

 

STP time frame for small and micro employers

Small Employers – Employers with 5 to 19 employees

  • Commence reporting through STP from 1 July 2019
  • Have been given an automatic three-month deferral
  • The ATO may grant deferred start date, however, generally only apply for a short period. (consult your tax agent for further information)

Micro Employers – Employers with 1 to 4 employees

  • Quarterly reporting until 30 June 2021 – for most micro employers already using the services of a registered agent, this will coincide with when their quarterly BAS is prepared and lodged
  • Commence reporting through STP from 1 July 2021
  • No-cost and low-cost STP solutions – affordable solutions can be found by searching ‘No-cost and low-cost solutions for Single Tough Payroll’ on the ATO website

Small Employers (5 to 19 employees) with closely held payees

  • This refers to family-owned business with only family members as employees or a few unrelated employees
  • Do not need to report ‘closely held payees’ through STP during the 2019/2020 income year
  • All other employees must be reported through STP from 1 July 2019 (deferrals may apply)
  • From 1 July 2020, closely held payees are reported quarterly (consult your tax agent for more options)

Please be aware that the above is general advice only. Consult your accountant before you act on it. Alternatively, CALL US to book a consultation session.