The Introduction of Single Touch Payroll and What it Means for Your Business
What is Single Touch Payroll?
Single Touch Payroll is the new way that small businesses report their employees’ tax and super information to the ATO.
At present, businesses with less than 20 employees report this information to the ATO once a year. However, from the 1st of July 2019 all businesses will be required to send a report to the ATO every time they process a pay run.
The reports must be submitted digitally, using a specific format. If you use accounting software, such as Xero the information will be sent to the ATO directly from this software.
What will change when reporting your payroll?
As you will be updating the ATO with each pay day, you will no longer need to finalise payroll records at the end of the financial year to produce:
• A Payment Summary Annual Report
• A Payment Summary for each employee
The information you submit to the ATO will be the sole record of salary/wages paid, tax collected and superannuation contributed for the year.
Your employees will be able to see this information by logging into their myGov account, instead of receiving a payment summary.
If you run your payroll through Xero
Xero specialise is making life easy for small business owners to be compliant with their accounting, reporting and record keep needs. They’ve created a Single Touch Payroll playbook for small and midsize businesses that you can download here.
To set up your Xero account with Single Touch Payroll it’s as easy as an OPT IN button and contacting the ATO to connect your account. However, once you’ve opted in you can’t opt out so you need to ensure that your account is set up correctly including your organisational details, employee’s information etc.
Email us today for assistance firstname.lastname@example.org or view the step-by-step process Xero has created here.
• For larger business with more than 20 employees, you should already be reporting through STP or have applied to the ATO to start at a later date.
• For businesses with 19 or less employees, reporting through STP is required from 1 July 2019
• For businesses with four employees or less, the ATO will be providing additional options.
Be ready for the switch! For assistance with setting up your Xero file, switching to an online accounting system or getting some advice. Please contact our office on 07 3124 0244 or email email@example.com