Single Touch Payroll – get sorted now!
Think your good old spreadsheet or notepad is good enough to keep track of employees’ wages? Think again!
On 12 February 2019, the Parliament has passed the laws requiring all businesses use single touch payroll from 1 July 2019.
This means that from 1 July 2019 onwards, all businesses that employ staff, whether it is 1 or 100, are required to register for single touch payroll to keep track of their employee wages, PAYG Withholding and superannuation obligations.
What is Single Touch Payroll?
Single Touch Payroll (or STP) is a new way for employers to report their wages obligations to the ATO. This includes reporting of wages, PAYG Withholding and superannuation obligations.
In the current system, employers are required to keep track of their employee’s pay records using their own system, and are only required to lodge their wages and PAYG Withholding amounts once every month, or every quarter.
With the STP rollout, employers are required to lodge their pay records through accounting software that complies with the ATO single touch payroll reporting system, every time they do a pay run. Employers are still only required to pay PAYG Withholdings monthly/quarterly and superannuation payments quarterly, this requirement hasn’t changed from the current system.
Instead of reporting every month or quarter on your Business Activity Statement (BAS), you will be lodging the amounts at every pay run, so these amounts will be made available to you (pre-filled) when you prepare your BAS. All you need to do when preparing BAS, is to verify the amounts are correct and you’re all set!
At the end of each financial year, you will no longer need to prepare and provide PAYG Summaries for your employees as they will be readily available for your employees every July.
I’m still using paper or spreadsheets, what should I do?
If you are still using pen and paper, or spreadsheet records, or if your current accounting software is not compliant with STP, you will need to start looking for a new reporting system that supports STP before it becomes mandatory on 1 July 2019.
This could mean purchasing cloud payroll software, or moving your accounting system to a cloud based system like Xero.
Many of our employer clients use Xero to run their businesses with a payroll module to handle wages, PAYG and superannuation. Click here to see our article about why you should consider moving onto the cloud.
Current Xero users, here is a link to the page that will help you register for STP.
MYOB users, look here.
If your current software offers modules, or solutions for you to report your payroll information, and you wish to stay with them, feel free to do so. If you need assistance setting up STP using your accounting software, let us know and we will give you a hand!
We are switching our payroll to STP this month so that we are ahead of the rush and will be able to focus on client needs as we get close to the deadline date of 1 July 2019!