Single Touch Payroll is almost here and will affect over 100,000 businesses who are paying 13 million employees from July 2018. A government initiative, single touch payroll (STP) is designed to simplify the reporting for payroll for those employers with 20 or more employees. While they currently only report on individual payments such as salaries and wages, PAYG withholding and super once a year at the end of the financial year, as of July 1, 2018 they will need to report this to the ATO at the same time they pay their employees.
Big accounting software companies have got your back
Larger software providers such as Xero, MYOB and QuickBooks are currently rolling out their STP software solutions. They have got your back with developing automated systems so that they do the work for you.
Following a beta trial by MYOB where they worked closely with the ATO to develop and trial an automated system and successfully submitted pay information in line with the STP requirements. MYOB COO Andrew Birch said that this first report is a milestone for business in Australia. “We know it is a big change for our customers and we have worked hard to ensure the transition is as smooth as possible” said Birch.
How STP looks in Xero
Xero will have a simple set-up process for Single Touch Payroll. During the STP setup, Xero will display your software service ID (SSID).You’ll need to provide it to the ATO in one of two ways. Either:
- call the ATO and notify them of the SSID, or
- login to ATO Access Manager (using AUSkey) and nominate a software service provider
Once you’re setup, the option to report a payment to the ATO will be presented for each pay run and your payroll information will be filed with the tax office.
Huge potential to make reporting a whole lot easier
With a bit of practice and set up STP has the potential to make reporting a whole lot easier. If you are using an automative accounting software such as Xero, MYOB or QuickBooks then you already complete all of the required information in order to accurately record payments and send payslips to your employees. They will enable you to automatically send this information to the ATO. This will then remove the rigorous end of year reporting and group certificate requirements to the ATO as they will already have the required information on hand for each employee. Like SuperStream it will take a bit of getting used to, but overall it is a really positive step and made exceptionally easy to execute with the proactive support of business software.
We are currently working with our clients to support the transition to STP. Follow our easy to understand Checklist to help guide your transition.
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