TAX REPORTING GETS SIMPLER
Tax reporting is set to become simpler for business owners and employees with a new innovation from the ATO called Single Touch Payroll (STP).
What is STP?
STP sends salary, wage, PAYG withholding tax and superannuation information to the ATO direct from your payroll or accounting software. Superannuation funds will also report to the ATO, advising when payments to your employees’ superfunds have been made.
This will make tax reporting simpler for both you and your employees. For instance, your employees will be able to see their year-to-date tax and superannuation information on the ATO online service, MyGov. And as a business owner, you will no longer have to give your employees a payment summary for the information you have reported and finalised through STP. Once you finalise your data, your employees can lodge their income tax return using the STP information available in MyGov. They won’t have to manually report this information to their accountant.
In addition, you will no longer need to provide the ATO a payment summary annual report at the end of the financial year for payments you have reported through STP. From 2020, the activity statement will be pre-filled at label W1 and W2 with information reported via STP. If you make mistakes in your STP report, you can correct it in your following report.
Are all businesses affected by the STP change?
Yes, but the impact varies depending on their number of employees. Here’s what you need to know.
My business has 20 or more employees.
Single Touch Payroll actually began for you from 1 July 2018 and you should be using the system, or have a deferral in place. Speak to your software provider if you think it doesn’t have the capacity to handle STP.
My business has 5 – 19 employees.
STP begins for you from 1 July 2019. If you need more time to get ready, you can apply online for a deferral or even an exemption if you live in an area with no or intermittent internet connectivity.
My business has 1 – 4 employees.
The ATO has asked payroll software developers to create no-cost and low cost solutions for you to handle STP including via apps, online portals and basic software. Here are a list of companies you can use:
You can also ask your tax or BAS agent to report your STP information every quarter rather than each time you do your payroll. This option will be available to you until 30 June 2021.
How do I report using STP?
You have 3 main options.
- Report using existing payroll or accounting software. Contact your software provider to find out if they provide STP and how to update your software.
- Choose STP enabled software. You may need to choose payroll software and we suggest the following options: MYOB, Xero, QuickBooks
- Tax agent STP solution. We can handle STP reporting on your behalf.
Not matter what size or type of business you run, if you need more information about Single Touch Payroll, contact John from Sciacca’s Accountants on 07 3357 5553 or email firstname.lastname@example.org