Single Touch Payroll (STP) is a new way of reporting tax and super information to the Australian Taxation Office (ATO).
Using a payroll software, or another solution that offers STP reporting, business owners can send employee salary and wage, pay as you go (PAYG) withholding and superannuation information to the ATO each time they process payroll.
Employers will need to finalise STP set-up/information by the end of the financial year (30 June) – to ensure the ATO is aware all reported data is complete.
- Pay cycles do not need to change (employers can continue to pay employees weekly, fortnightly or monthly)
- Employers will now report superannuation information to the ATO
- Employers will no longer provide payment summaries – this information will be available to employees via their myGov account.
Approximately 85 percent of Australian employers* are currently compliant with STP, either reporting or having an active deferral in place:
- 111,000 employers reporting in relation to 7 million employees
- 52,000 mandated employers reporting
- 59,000 small employers voluntarily commenced reporting.
Employers can report anytime from 1 July – 30 September 2019. If unable to do so, employers are required to apply for a later start date.
*As of 29 May 2019.
- ATO has published a list of no/low-cost options for micro-employers (1 – 4 employees)
- ATO has developed concessional options for employers with closely held payees
- Small employers that make a genuine attempt to switch to STP, will not incur penalties for mistakes, missed or late reports within the first year
- ATO will provide exemptions from STP reporting for employers experiencing hardship, or in areas with intermittent/no internet connection.
Employee experience this tax time
- The way employees receive their payment information is changing, they will no longer receive a payment summary if their employer is reporting through STP
- Since the introduction of STP, employees and tax agents can access end-of-year tax and super information via their Income Statement (previously called a Payment Summary). This Income Statement is available through their ATO Online account in myGov and ATO Online for Agents. It should be noted the Income Statement information will prefill for individuals and agents
- Employers reporting through STP are required to finalise year-end employee information, which replaces the annual payment summary process. From 1 July 2019, the Income Statement will be prefilled using employer ‘unfinalised’ data. Income information will not have been validated but it will be prefilled. A ‘Not Tax Ready’ status will be clearly marked in ATO online services until the employer has validated the income information
- Income tax returns may still be lodged with a ‘Not Tax Ready’ status, with the acknowledgment that the employer may finalise the Income Statement with different amounts. However, it should be noted that this may result in an amendment to the tax return and additional tax may be payable.
Employer experience this tax time
- If an employer commenced STP reporting part-way through the year and reports the full financial year employee income, the employer is not required to provide a payment summary to individuals or report an annual payment summary return to the ATO
- If there are any employees who have not been reported through STP, then a payment summary and an annual payment summary report are required. An example of this may be where an employee left the employer prior to the commencement of reporting STP.
How to transition to STP (webinar)
STP for closely held payee (webinar)
EOFY processing with STP (webinar)
STP fact sheet