16th April, 2020
Single Touch Payroll, or STP, is an important element of receiving JobKeeper stimulus payments. Here’s what you need to know.
Single Touch Payroll is crucial for businesses wanting to quickly and easily access the Government’s ambitious JobKeeper wage subsidy scheme, which aims to provide payments of $1,500 per fortnight to millions of Australians via their employer.
This means that any small businesses that have managed to defer the implementation of Single Touch Payroll will either need to get on board with it quickly, or you’ll need to apply via two other methods the ATO is offering — either via a registered tax or BAS agent, or via a manual form.
Useful resources regarding the JobKeeper scheme:
So, if you’ve been putting Single Touch Payroll off and you want to avoid some pain when applying for JobKeeper, now’s the time to get set up.
Single Touch Payroll (STP) has been live for over a year. It was first launched for employers with 20 or more employees, but legislation passed early last year means it now also applies to smaller employers.
It’s important to be aware that STP is mandatory for organisations of all sizes.
READ: Everything you need to know about STP Phase 2
STP is a more efficient way of reporting your employee salaries, wages, Pay As You Go withholdings and superannuation to the Australian Taxation Office (ATO). It also helps the ATO quickly and accurately determine a businesses’ eligibility for JobKeeper payments, by data matching information provided by businesses about their employees to the information provided by superannuation companies about those same employees.
STP involves electronically reporting your employees’ payroll information to the ATO each payroll cycle, whether you pay weekly, fortnightly or monthly.
STP brings far greater transparency to the tax system, and allows businesses to connect to the ATO through their existing accounting software, such as MYOB. It improves payroll processes, which in turn saves time and improves accuracy.
Put simply, STP simplifies payroll processes in your business.
It helps employers save time, reduce mistakes and makes reporting employee payments easier than ever. Cloud-based software allows your payroll information to be submitted automatically to the ATO, meaning no more annual PAYG summaries — and more time and resources in your business.
Small businesses need to make sure their payroll system is connected to the ATO and that they send their employee’s tax and super information through each and every time they run their payroll and pay their staff.
Just keep paying your employees as usual, and give them a payslip – you’ll see a step in the process that pushes reports directly to the ATO after each pay run is complete.
The ATO will use data obtained from STP to administer the JobKeeper system and make certain that employers only receive the subsidy for eligible employees.
This means that businesses should make sure that employees remain registered through STP to receive the payment.
Also, bear in mind that businesses will need to be up to date with BAS and tax lodgements and payment obligations to receive the stimulus without delays.
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You get what you pay for in life, and if you’re using a free cloud accounting platform, it might be the right time to look at upgrading to something that better suits your business needs.
So, if business is quiet due to COVID-19, now could be the right time to look at switching software providers.
Take a look at the ATO’s STP Software Register to find out what products are available, including open source payroll software.
If your business currently uses MYOB Essentials or MYOB AccountRight, STP reporting is included in your subscription.
If you’re not already a MYOB customer, MYOB is offering Australian businesses STP-ready payroll software allowing you to complete your payroll tasks and stay ATO-compliant.
There’s also a really handy guide by the ATO available here. Or, you can call the ATO directly for assistance on 13 72 26.
For advice specific to your situation, MYOB recommends consulting an experienced and registered tax agent. You can begin searching for a tax advisor here.