What is Single Touch Payroll and what does it mean?
What is Single Touch Payroll (STP) and what does it mean? Which accounting software should I use? XERO/MYOB/Reckon?
Single Touch Payroll (STP) commenced on July 1, 2018 for large employers (with 20 or more employees), however, from 1 July 2019 small employers (with less than 20 employees) are now also required to report details of employees’ tax withholding and superannuation information to the Australian Taxation Office (ATO) at the time they process their payroll using Single Touch Payroll (STP) software.
Single Touch Payroll is also called ‘real-time payroll reporting’ because it means every time a business pays their staff, all the salary information is sent to the ATO. This includes wages, deductions and superannuation information, eliminating the need for Pay As You Go Withholding Activity Statements throughout the year.
Why STP?
Basically, it’s a more efficient way to run the taxation system. In theory, it also makes it harder to operate in the ‘black economy’ because the ATO has a better understanding of who is being paid what and when. Single Touch Payroll is designed to streamline business reporting and help the ATO monitor whether employers are complying with their Superannuation Guarantee and PAYG Withholding obligations. By reporting through Single Touch Payroll, employers need not complete Pay-As-You-Go Withholding Activity Statements throughout the year and Payment Summaries will be available to employees through MyGov.