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On 12 February 2019, the Australian Government officially passed legislation that expands Single Touch payroll to ALL employers. Single Touch Payroll (STP) became mandatory on 1 July 2018 for all employers with 20 or more employees.
This is the second phase of Single Touch Payroll and will be mandatory for all employers with 19 or less employees from 1 July 2019.
1. STP represents one of the biggest changes to the way all businesses employing staff in Australia will be reporting salary and wage payments to the Australian Taxation Office (ATO).
2. STP is an ATO compliance regulation that requires employers to send employee payroll information including salary, wages, PAYG withholding and superannuation to the ATO at the same time as their standard pay run.
3. STP is a significant change that will require many employers to upgrade or replace their payroll systems this financial year in order to meet their payroll reporting obligations.
4. The ATO have announced special rules for STP micro employers 1-4 employees.
5. Software suppliers have worked closely with the ATO to offer a low-cost or no-cost payroll solution to small businesses so they are in total compliance with the law.
Quarterly reporting for closely held payees and seasonal employers
1. What about employers running seasonal operations or who only intermittently have staff?
2. What about those closely held payees, who employ staff members who are not ‘held at arm’s length’ such as family members in a family business?
3. ATO has stated that small employers that include closely held payees are exempt from STP for the 2019-20 financial year.
4. What are closely held payees? According to the ATO, they include family members of a family business, directors or shareholders of a company and beneficiaries of a trust.
5. For these employers, STP can be reported quarterly from 1 July 2020.
6. Businesses with seasonal or intermittent operations, there are some concessions according to business size.
7. If, at a maximum, they employ 19 or fewer shortterm employees, then there is a concession automatically available by application via the business’s registered tax or BAS agent.
8. For seasonal businesses who employ more than 19 short-term staff during peak periods, the ATO is saying they will review their application (via registered agent) on a case-by-case basis.
With STP, employers no longer need to complete payments summaries and group certificates at the end of the financial year. That will now be taken care of every time employees are paid, as their tax and super information is sent to the ATO and available to the employee through their digital myGov account, that they must set up to receive this information.
