Single Touch Payroll (STP) is a reporting change for employers which starts from July 1 this year. If you are an employer with 20 or more employees, this change will mean you will soon report your employees’ payroll and superannuation information to the Australian Taxation Office each time you pay your employees.
To get ready for this change, you should start by determining your ‘STP-readiness’, which may be one of the following scenarios. For each scenario, there are specific steps to take to continue to prepare and ensure you are able to start reporting through STP as soon as possible.
1. Your software has been updated by your software provider and you are reporting through STP now
You don’t need to do anything else to prepare as you are already underway with STP reporting. As you continue to report through STP, remember that the first year is a transition year. If you make a mistake in your report, you will have a period of time to review and make corrections to the information you have sent in your next report or through an update event. For more information, visit the ‘Correcting a pay event’ page on the ATO website.
2. Your payroll software will be updated by July 1 and you will be ready to report through STP from that date
This online checklist has some tips to help you prepare. Talk to your software provider to find out how to update your software to a version that is STP-enabled. Make sure the right people in your business know about STP — especially your payroll staff.
Take the opportunity now to make sure you have accurate data, including employee dates-of-birth, names and addresses and tax file numbers. Check that you are paying your employees and calculating their super correctly before you start STP reporting — this will help ensure a smooth transition.
3. Your software provider has applied to the ATO for a deferred start date, or been granted a deferred start date, and it covers the software you are using
If your software provider has a deferral, they will give you a Deferral Reference Number; this is for your records only. You don’t need to apply for your own deferral unless you need additional time beyond that deferral date.
It’s a good idea to speak with your payroll software provider during this time to understand how they will work with you to help transition you to STP. You should also subscribe to their communications for updates. In the interim, as with the above scenario, take the opportunity to review your business processes.
You can use the ATO’s online form if you need to apply for your own deferral.
4. You are not ready for STP and you need to apply to the ATO for a deferred start
If you are not ready to start using STP from July 1 you can apply for a deferred start date for your business. You might need a deferral if you:
- have a customised payroll solution;
- have complex payroll arrangements;
- are affected by other circumstances outside your control;
- are transitioning to a new STP-enabled solution; or
- are unable to get ready by your software provider’s deferred start date.
If you believe you need to apply for a deferred start date, the first step is to use this online form and make sure you have all the information the ATO needs.
5. You are not ready for STP and you have applied to the ATO for a deferred start date using our online form
It’s time to start preparing so you are ready to start reporting by your deferred start date once this is confirmed. You should also follow the steps in this online checklist to ensure your business processes are updated (see scenario two above also).
6. You haven’t taken any action yet
Only employers with 20 or more employees need to get ready by July 1. If you’re not sure STP applies to you, count the number of employees who were on your payroll on April 1, 2018, using this guide; if it totals 20 or more, you need to get ready.
What next? The steps in our online checklist are a good place to start!
If you’re still unsure about what steps to take to ensure you are ‘STP-ready’ visit the ATO website or talk to your registered tax or BAS agent for advice on how to get ready.