Single Touch Payroll, also called STP, is an initiative from the ATO to encourage frequent salary and wages reporting. This means you’ll be required to report salaries and wages, PAYG withholdings, plus superannuation, every time you pay your employees whether thats weekly, fortnightly or monthly.
From 1 July 2022, all Australian small business owners are required to report additional their payroll information. This will normally be managed by your software payroll provider.
What does that mean for Employers?
For some businesses, the only change you’ll need to make is reporting more frequently instead of once at the end of a financial year. If you currently use payroll or accounting software that offers Single Touch Payroll, you can start reporting any time.
Employers are not required to provide payment summaries to their employees or lodge a payment summary annual report for information they report and finalise through STP.
You need to tell your employees:
- You will not be providing them with a payment summary
- Their payment summary information will be called an income statement in ATO online in myGov
- They will need to log into their myGov account, select ATO online services, click on my profile, select my employment and then income statement to access this information
- If they use a registered agent to lodge their income tax return, their agent will receive their income statement information directly from the ATO
- If they don’t have access or cannot create a myGov account and don’t use a registered agent they can call the ATO on 13 28 61 and they will provide this information to them.
What does that mean for Employees?
You most likely will not be getting a payment summary
income statements will replace payment summaries
Employees can access their income statements through ATO online via myGov at any time. They can only use this information to lodge their tax return when the income statement has a status of ‘Tax ready’.
What if you do your Payroll Manually?
You will still need to have a payroll system regardless of the number of employees. Also certain director payments and dividends will also be required to be reported, but there is likely to be a 12 month deferral on this reporting.
How do I install it?
The good news is that if you hold a Xero, Quickbooks or MYOB Essentials subscription, you barely need to do a thing. STP is now available to all businesses on these systems.
Who should opt in? Me, my accountant or bookkeeper?
Whoever is intending to file STP reports should opt in. So if you are filing your own pay run, you should opt in. But if both you and your bookkeeper are going to file them, you can both opt in.
If you don’t have a Bookkeeping system or Payroll, and you live in the Bendigo area, there are several available on the market staring from $10 per month for a maximum of 4 employees.
Let Bendigo Bookkeeping guide you through this new legislation with a minimum of fuss. Please call Maurie on 0418 573 667 or James on 0418 515 915