From July 1 this year, all employers must use Single Touch Payroll reporting. STP is billed as the biggest tax change since GST. Preparing for this will allow you to transition smoothly to the new system.
What is STP?
STP changes how you report your employees’ payroll and superannuation data to the ATO. In the past, businesses reported payroll information to the ATO every month or quarter. Now you will need to report payroll AND superannuation info whenever you pay your employees.
If your existing payroll software is updated for STP, you can use it to register for STP.
STP is a more efficient way of payroll reporting. Each time your employees are paid, the ATO will get information about their salaries and wages, allowances, deductions and other payments, PAYG withholding and superannuation.
What do you need to do?
- Make sure your accounting software is STP-enabled by July 1 2019. MYOB, Quickbooks and Xero are all STP-enabled. Xero and MYOB will offer a new STP-enabled Payroll-only product priced at around $10 per month for businesses with four employees or fewer.
- Use your software to register for STP by July 1 2019
- Once you’re set up, stop providing your employees with annual payment summaries – this info will be available through MyGov.
- Complete a finalisation declaration at the end of the financial year so that your info is tax-ready for your agent and employees.
How to register
Jigsaw supports Xero, MYOB and Quickbooks.
- Select “Pay Employees” from the Payroll menu.
- Click “Get Started” in the message about Single Touch Payroll and follow prompts.
- Update your Organisation Details if necessary.
- Connect your Xero account to the ATO by calling them or using your AUSkey to access the ATO portal.
- Provide the ATO with the proof of ownership listed in Xero’s prompt.
- Select the checkbox to confirm that you’ve contacted the ATO, and then click “Register.”
- Go to the Payroll command centre and click “Payroll Reporting.”
- Click “Check Payroll Details” and fix errors, if necessary.
- Click “Connect to ATO” and follow prompts to complete the connection. You will need to enter the details of everyone who processes payroll and check your ABN, and then enter your MYOB product key.
- Click on “Employees” in your Quickbooks account and sign up to KeyPay
- Click “Payroll settings” and then “Electronic Lodgement and STP”
- Click “Enable Single Touch Payroll.”
Do I need to change my business’s pay cycle?
No, you can continue to pay your employees every week, month or fortnight. Your software will report to the ATO whenever this happens.
Who does STP apply to?
STP has applied to businesses with more than 20 employees since July 2018. From July 2019, it will apply to all businesses with employees.
Will I need to keep submitting payment summary annual reports?
If you use STP reporting, you won’t need to submit a PSAR in June 2019 because the ATO will make the information available to employees through MyGov.
Do I still need to submit a BAS?
Can I start using STP before July 1 if I have 19 employees or less?
Yes. STP reporting is already offered by common payroll softwares.