What is Single Touch Payroll?
Single touch payroll or STP is an ATO initiative to encourage frequent income reporting.
The STP scheme requires employers to report the following, each time an employee is paid;
- PAYG withholdings
Some businesses still use excel spreadsheets and paper to manage financial transactions, including payroll. That’s why the ATO have introduced Single Touch Payroll. It’s a not-so-gentle nudge for businesses to embrace cloud-based accounting.
When do the STP changes start?
From 1 July 2018 STP became mandatory for employers with 20 or more employees.
From 1 July 2019, all Australian business owners will be required to report payroll information directly to the ATO.
What does Single Touch Payroll mean for me as an Employer?
Single Touch Payroll means that outdated financial reporting practices are being phased out. As an employer, you need to embrace the digital age of cloud software and automated reporting.
Don’t be alarmed. The process is straight-forward, and the Lumos Business Solutions team are here to help.
For some business owners STP will be as simple reporting more frequently i.e. instead of reporting once at the end of the financial year a report will be submitted every pay cycle.
If your business is already using payroll or accounting software with Single Touch Payroll, reporting can start now. Ask us how.
For employers that have not yet broken free of the paper-and-excel-shackles of payroll management then there will be extra work to do.
What do I need to do to be ready?
The 1 July 2019 introduction date means your business may need to make some changes now to prepare.
Here are some tips for where to start to ensure your business is STP ready.
For Xero users
If you have Xero Payroll, you may be already compliant. Touch base with the Lumos team to find out.
Check to make sure your staff have everything they need between now and the end-of-financial-year. Some training may be required to bring some staff up to speed and refresh others.
For Non-Xero businesses
Still using spreadsheets? If so, you need to start thinking about purchasing cloud payroll software.
Businesses using desktop software also need to consider purchasing cloud payroll software.
If you are contemplating switching to Xero from another cloud-based accounting software, contact us.
The Lumos Business Solutions team can illuminate you about the range of products Xero provides.
For ALL Business Owners
EOFY is a busy time. The Lumos Business Solutions team suggest you set time aside now to ensure your business will be ready for the introduction of single touch payroll on 1 July 2019.
If you have questions, contact us.