The single touch payroll system has been mandatory for virtually all businesses in Australia since 2019. This system is designed to digitise payroll reporting to the ATO in order to provide up to date data and accounting across the country. In theory, the process is now easier for employers too. However, if you are like most employers, you will still have questions that need answering.
Getting to the bottom of all of these questions and confusions is much easier with the use of STP software. STP software helps business owners navigate the nuances of the payroll changes that single touch payroll has brought. With STP software, you will be able to better handle your compliance with the single touch payroll system.
Let’s look at some of the essential points that small and medium-sized business owners need to know about STP and STP software.
Some Essential Points About Single Touch Payroll
The single touch payroll system requires business owners in Australia to submit a variety of data points on their employees for each pay period. This includes wage and salary information, as well as pay as you go withholding and superannuation information.
It might seem like reporting this information for every pay period merely represents a new burden placed on the already-busy schedules of business owners in the country. However, STP reporting does not have to be difficult. In fact, with STP software, the process is easy.
The Australian Taxation Office has also published a detailed list of reporting guidelines to usher in the new system. If you have any questions or uncertainties about the new process, this is an excellent resource. You can also contact the ATO directly or consult with your registered tax agent.
What Is STP Software?
There are many providers of single touch payroll software that employers can turn for assistance. Depending on how your business operates and what the unique characteristics of your payroll processes are, different software packages will be better for your needs than others.
For example, micro employers who have four or fewer employees are directed by the Australian Taxation Office to use no-cost or low-cost solutions for complying with the single touch payroll system. These solutions are less than $10 per month, take minutes to complete each pay period, and do not require employers to maintain the software. A list of providers for these solutions is available on the ATO’s website.
For other employers, STP-enabled software is one of the most efficient ways to report single touch payroll information. In many cases, payroll software has already been upgraded to meet the new compliance requirements under the STP system. This allows you to retain your familiarity with your existing payroll software and simply complete a quick extra step to submit the data to the ATO. Alternatively, you will have to submit your data through the ATO’s online portal or through a third-party tax representative.
When you choose to use STP-software to submit your payroll information, this usually comes with an option to submit the data directly to the ATO through the software itself. Speak with your software provider if you are not familiar with how to complete this step.
Be Patient With The Process
Adjusting to the single touch payroll system will take some patience. The ATO has made the transitional phase easier for employers by reassuring them that there will be a grace period. As you figure out how to submit your payroll information to the ATO, let STP software help you out. Software makes the process seamless with your current payroll processes and will make the transition to STP easier to implement.