Single Touch Payroll Reporting: What You Need to Know
If you’re navigating the world of payroll, you’ve likely heard about Single Touch Payroll (STP). This government initiative is designed to streamline payroll reporting, making it easier for businesses to report their employees' tax and superannuation information to the ATO (Australian Taxation Office) each pay cycle.
What is Single Touch Payroll (STP)?
Single Touch Payroll is a reporting system introduced by the ATO to simplify how employers report their payroll information. Under STP, employers are required to report employee payments, PAYG withholding, and superannuation contributions directly to the ATO at the same time as they pay their employees.
Key Benefits of Single Touch Payroll
Streamlined Reporting: STP eliminates the need for separate reporting to the ATO at the end of the financial year, as information is reported each pay cycle.
Improved Accuracy: Reporting through STP reduces the risk of errors in payroll reporting and ensures that employee information is up-to-date.
Employee Transparency: Employees can access their year-to-date tax and superannuation information through myGov, providing greater transparency and understanding of their financial situation.
Who Needs to Comply with STP?
Since its introduction, STP has been phased in for different sizes of businesses:
Small Employers: Businesses with 1 to 19 employees are required to report through STP.
Micro Employers: Small employers with 1 to 4 employees have the option to report quarterly until 30 June 2024, after which STP reporting will be mandatory.
How to Get Started with STP
Choose STP-enabled Payroll Software: Ensure your payroll software is STP-compliant. Most modern payroll systems support STP reporting, so check with your software provider or upgrade if necessary.
Register with the ATO:Inform the ATO that you’ll be using STP for reporting. You can do this through your business portal or by contacting the ATO directly.
Update Employee Information: Ensure all employee details, including TFN (Tax File Number) declarations and superannuation fund details, are up-to-date and accurate in your payroll system.
Start Reporting: Begin reporting employee payments, tax withholdings, and super contributions through STP each time you run your payroll.
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