You would have seen a lot of information about single touch payroll in the last few months and now it's here.
In case you haven't been following along, let's have a quick recap. Single Touch Payroll is a new regulation that changes when and how small businesses report payroll activity to the Australian Taxation Office.
Each time you pay your employees you will also be sending your employee salary and wage information, pay as you go (PAYG) withholding and super information to the ATO (these will be year-to-date amounts).
You need to ensure your payroll software is single touch payroll compliant. Xero, MYOB and QuickBooks Online is STP compliant and needs very little action work on your side.
As part of STP you will not be required to provide PAYG Payment Summaries to your employees as they will need to access their Income Statement from MyGov.
You will continue to pay superannuation as you have been through a clearing house, either through your bookkeeping software or through the small business Superannuation clearing house. The change to superannuation is that you will report your Superannuation liability to the ATO at each pay event. Super funds will then report to the ATO when you make the payment to the employees super fund.
So the ATO now has visibility of super obligations and payments.
Preparing for STP
Review your business processes and data.
Before you start reporting through STP, you should review your current payroll processes. Clean up any anomalies in your master data – in particular, those errors which may be detected through current processes such as issuing payment summaries or a payment summary annual report at the end of the financial year.
This includes checking your employee information is accurate, including names, addresses and dates-of-birth. Check if you are addressing over payments, calculating super and paying employees correctly.
In order to comply with your STP obligations you must report the pay event before or on the date of payment.
Each reporting event will show the year to date figures, which the employee can access on MyGov at any time.
At the end of the financial year you will need to advise the ATO that you have the STP for the year .
How to Opt-In to STP
When you are ready to opt in to Single Touch Payroll in
Xero follow these steps:
Click payroll /Overview / Set up STP
Review the organisation information and ensure it is correct
Click continue
Connect to the ATO the contact details are on the screen, you will need to provide the ATO with the information shown at step 2
Once you have connected with the ATO click I have contacted the ATO to connect your account.
Once registered you process payroll as normal. There will be a File button at the bottom which will take you to the Authorisation screen.
Tick the box to confirm you have the authority to submit, then click Submit to the ATO.
IF you make an error you can correct the error in the next pay run.
If you have any trouble the ATO have many resources on Single Touch Payroll or contact our office.
Below are some further resources regarding some concessions for smaller employers:
STP for small employers – you need to be registered before 30 September 2019 some concessions apply for employers of 1-4 employees. Click here for more details
STP for closely held employees – you don’t need to do anything until 2020. Click here for more details
Feel like you need more information on STP? Read my earlier blog What you need to know about Single Touch Payroll- Click here or on the image below
If you would like some help in getting set up with STP, Payroll or cloud accounting just get in touch by the contact form or book in a discovery call by clicking here
