Single Touch Payroll (STP) will mean that by the end of this financial year, all medium and large companies will be faced with the biggest payroll reporting change in Australia’s history.
Under Single Touch Payroll, employers will need to report employee payments to the Australian Taxation Office (ATO) every pay run. To enable the increased reporting frequency, a communication system has been created to tightly connect payroll systems with the ATO. Smaller employers can also choose to opt in to enjoy the benefits such as streamlined reporting and online forms.
Like GST and BAS, the introduction of Single Touch Payroll means every affected employer will need to either upgrade or replace their payroll system this financial year in order to meet their payroll reporting obligations.
What is Single Touch Payroll
Single Touch Payroll is an Australian government initiative that changes the way businesses report on employee payments. Under STP, your payroll solution will need to be updated. When you pay your employees through your Single Touch Payroll-enabled solution you will be reporting payments such as their salaries and wages, allowances, deductions (for example, workplace giving) and other payments, pay as you go (PAYG) withholding and super information to the ATO at the same time.
Your payroll cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly. You may have different pay cycles for different employees. It simply means that when you complete your payroll, the tax and super information for each employee will be sent to ATO.