Single Touch Payroll (STP) will be mandatory for all employers from 1st July 2019 (previously it was only applicable to businesses with 20 or more employees). If your business is a closely-held entity, then you do not need to start using STP until 1st July 2020.
If your business is not a closely-held entity, you need to be ready (more info about Closely-held entities here). It is a good idea to get it set up now so that you are compliant by 1st July. However, ATO has confirmed that they will be lenient toward small businesses during the initial transition to STP.
This extension of the legislation to include small businesses could be very daunting for employers who are not already using an online payroll solution. Our clients can be assured that we will help them through the set up process if they require guidance.
What is Single Touch Payroll?
When you use a payroll management software (either online or using an installed program that can send data to ATO electronically), you are able to communicate data to ATO every time you process a payslip for an employee. This eliminates the need to report wages on a Quarterly basis in the BAS or to send ATO payment summaries and annual PAYG statements. While the set up and transition can cause smaller employers some confusion and anxiety, using this system on a regular basis is incredibly simple and efficient.
Does your business need to use it?
From what we have read on ATO’s guidelines and press releases, ALL (non-exempt) employers will need to use STP from 1st July 2019, even if they are considered “micro employers” with 4 or less employees.
If you are a micro-employer, you can report to ATO quarterly (same as BAS cycle). You would therefore be submitting quarterly payslips through STP software instead of a more regular cycle such as weekly or fortnightly. However, Micro-employers can still choose to report on a more frequent pay cycle if they wish.
How to get set up:
The first step is to have a cloud-based payroll management system.
Some software providers have developed a low cost cloud based software for micro-employers who only need to be STP compliant but do not want any other cloud-based software for their business. Our recommended provider is Xero ($10 per month), which we can assist our clients to set up. If you want to shop around, the ATO has listed these providers as well.
Once you have set up your account online, you will need to register an Auskey for your business. This is a relatively simple process. If your business is a company, you will need one of the directors to register (have your TFN at hand).
After you have registered your Auskey, you can go to ATO’s Access Manager and log in using your Auskey.
Click on the link from the left-hand menu titled “My Hosted SBR Software Services”.
Find your software provider from the list (or search by name or ABN) and select
Add your software ID# (this can be found when you are logged in to your payroll software during the STP set up).
You will need to confirm and save.
Go to your software provider website, log in and go to STP set up
Make a declaration that you have “advised ATO” about your SBR Service Provider and follow the steps to complete the set up (the steps will be different for each software provider, but it should all be fairly straight forward).
Now you are ready to report your wages and super to ATO using STP.
To view ATO’s step by step guide for adding Software Services on access manager, please click here.
Can B&A (Bentley & Associates) set this all up for your business?
Yes, we can certainly help you. We can also set up the software package for you, using your banking details for the subscription. If you opt to use Xero and are switching from MYOB or Reckon and want to get your whole business set up on this platform, there are financial rebates you can receive as a client of B&A. Please contact us for more information about this and to discuss our set up fees.
If you need help with STP set up, please get in touch with us ASAP, as we will not be able to provide this service between 1st July and 31st December 2019 (due to “Tax Time”).