Single touch payroll is the new way wages paid by businesses and a more simplified way of reporting your tax and information to the ATO. It is a legislative requirement which has been in place since July 2018 for companies in Australia housing more than 20 employees. The way it works is that it sends al of your business relevant information to the ATO as you progressively run your payroll. This improvement allows your reporting process to become more streamlined, less chance of error and improving the access for new employee information.
How will Single Touch Pay affect my business?
Incorporating Single Touch Payment, there will be a couple of things which will change in how your business is run.
- All payment events reported in real-time: This includes salaries, allowances, reimbursements, deductions, PAYG and superannuation. This style of reporting is computed through STP enabled software.
- Business activity statement: For all small businesses, both W1 and W2 labels are pre-filled as of July 2018. Relatively large PAYG withholders will no longer have to report their PAYG through statement activity.
- Easily accessible information for employees: Employees will be able to view their annual payment information by using their myGov account or by requesting a copy from the ATO.
- SGC liabilities which were previously provided to employees on their payslips will now be reported via STP. The employee’s complying superannuation fund will report to the ATO once the employer has paid the compulsory SGC liability to the employee’s chosen or default fund.
What do I need to do for Single touch payment?
There are some things you can do right now to prepare your business for single touch payment. One of which is by completing a full payroll audit which you can do here at DPS Accounting. Before this, it’s essential you check the following:
- All employees’employees’ details are entirely up to date
- Check employees Tax file numbers are correctly recorded
- Cross-check all employees pay rates to ensure that they are compliant with the industry standards
How should I count my employees for Single Touch Payment?
When counting employees for STP, it’s essential you include every employee as opposed to their full- time equivalent. The headcount should be precisely the same as the number of people on the company’s payroll. These will include:
- Employees on full-time
- Employees on part-time
- Casual Employees
- Overseas employees
- Any employee on absence or leave.
Do I need it if I am a small business employer?
Yes. New legislation forces all companies in Australia to use the Single Touch Payment method even if you employ just one worker. Luckily here at APS accounting, we have a range of low-cost plans which you can check out to find the best option for you.
Single Touch Payroll is mandatory for every employer in Australia, so if you’re a new business and employing staff; it is vital you understand the STP requirements you need to follow in order to remain compliant. So, if you’re unsure click here to ask an expert on how to streamline the way your business pays its employees successfully. We are more than happy to help.