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  • About Single Touch Payroll

    We have produced the following summary factsheet as a handy resource:

    Single Touch Payroll (STP) aligns your reporting obligations to your payroll processes.

    You will report to us each time you pay your employees. Your pay cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly.

    The information you send us will include your employees' salaries and wages, allowances, deductions (for example, workplace giving) and other payments, pay as you go (PAYG) withholding and superannuation information.

    Employers with 20 or more employees:

    • You need to start reporting to us through STP from 1 July 2018 if your software is ready.
    • Some payroll software providers have asked us for more time to update their products – check if your product has a deferred start date.
    • If your software will be ready by 1 July 2018 but you won't be ready, you will need to apply for your own deferred start date.

    Employers with 19 or less employees:

    • From 1 July 2019 STP will be mandatory, subject to legislation passing in parliament.
    • You can choose to report through STP before 1 July 2019 if your software is ready.

    What will change with Single Touch Payroll

    Each time you pay your employees, you will report the tax and super information to us from your Single Touch Payroll (STP)-enabled payroll solution.

    You will not need to provide payment summaries to your employees for the payments you report through STP:

    • Employees will be able to view their payment information in ATO online services, which they will access through their myGovThis link opens in a new window account. Your employees can also request a copy of this information from the ATO.
    • To be exempt from giving payment summaries, you will need to make a finalisation declaration.

    From July 2019 we will pre-fill activity statement labels W1 and W2 with the information we have received from you. If you are a small to medium withholder, you will continue to lodge an activity statement as you do now.

    Summary of legislative changes

    Current law – till 30 June 2018

    • Employers are required to withhold amounts from an employee’s salary or wages at the time it is paid. They notify the Commissioner of Taxation of the amount withheld at a later date, remit these amounts to the Commissioner, provide each employee with an annual payment summary and provide an annual report to us.
    • Employers are required to report superannuation contribution information to funds on the same day they make a contribution to the fund (through SuperStream). Employers are not required to report this information to us.
    • However, employers must lodge superannuation guarantee (SG) statements to the Commissioner if they have a SG shortfall for a quarter, or if required to do so by the Commissioner under the Superannuation Guarantee (Administration) Act 1992.

    New law – from 1 July 2018

    • Employers with 20 or more employees are required to report to the Commissioner through Single Touch Payroll-enabled software.
    • The following information must be reported on or before the day you withhold from a payment (the pay day):
      • payment information, including salary or wages, allowances, deductions, etc.
      • withholding amounts
      • superannuation liability information or ordinary times earnings (OTE).
       
    • Employers who fully report all the information required through Single Touch Payroll will not have to comply with a number of other reporting obligations under the existing law. This includes providing certain payment summaries and the corresponding payment summary annual report (PSAR). They will need to provide a finalisation declaration with us.

    How to report

    You can report through Single Touch Payroll (STP) in one of the following ways:

    • Report from your current payroll solution when it is STP-ready.
      • A payroll solution is the accounting, business management or payroll software you use to run your payroll and pay your employees.
       
    • Report from a new payroll solution which is STP-ready.
    • Ask a third party, such as your registered agent, to report through STP on your behalf.

    Report from your current payroll solution

    Talk to your payroll software provider to find out how and when your current payroll solution will be ready for Single Touch Payroll (STP).

    Your payroll software provider may offer STP reporting in one of the following ways:

    • An end-to-end solution, which allows employers to report and send the file directly to us.
    • A solution which allows employers to report through their software and send the file through a third party, which is integrated into the software.
    • A solution that offers STP reporting only. Employers will need to send the file to us separately through a third party, such as a sending service provider (SSP).

    Your provider can let you know which solution they offer.

    You can also refer to the Australian Business Software Industry Association (ABSIA) product catalogueExternal Link for details of STP-enabled products and third-party solution providers.

    Choose a new payroll solution

    You may need to choose a new payroll solution if:

    • you currently report to us on paper
    • your existing payroll solution will not offer Single Touch Payroll (STP) reporting
    • you want a product that better suits your business needs.

    You should make sure your new payroll solution offers STP reporting. You may want to speak to your registered agent to find out which payroll solution best suits you.

    You can also check the ABSIA product catalogueExternal Link.

    Ask a third party to report on your behalf

    You can ask a third party, such as a registered agent or payroll service provider, to report on your behalf.

    It is your obligation as an employer to make sure they will be reporting through Single Touch Payroll.

    See also:

    Last modified: 24 May 2018QC 54702