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In the past, employers used to report payroll activity to the ATO on an annual basis. The ATO has introduced what is called “Single Touch Payroll” (STP) requirements that means employers have to report after each payday.

Businesses with more than 20 employees switched to the new system on 1 July 2019. Employers with less than 19 employees need to start reporting via single touch payroll before 30 September 2019.

Micro businesses (less than four employees) have additional options, including using STP or through their quarterly reporting through their tax or BAS Agent. The option to lodge via your tax or BAS Agent is only available until 30 June 2021.

What’s changing

  • No more payment summary annual reports needed for the ATO.
  • No more employee benefit summaries. The STP sends the details directly to the ATO and employees can check this information by logging into their myGov account.
  • You need to report to the ATO online after each pay run, using a format called Standard Business Reporting (SBR).
  • Your super guarantee liability will be included through STP, and super funds will report to the ATO when you have made payments for your employee’s superannuation.

What stays the same

  • Your pay cycle.
  • You still need to provide payslips to your employees.

Most good payroll and accounting packages have STP capability built-in. Talk with your bookkeeper or accountant to help you correctly set up your STP reporting requirements, and to walk you through the new steps you need to do each pay run.

Remember to also talk with your employees about the changes, particularly around tax time as they may be confused at not receiving their employee benefit summary/group certificate.

The ATO has taken a lenient approach to STP compliance during the first year of operation for the larger businesses, and is expected to do the same for small and micro-businesses. Businesses generally have not been penalised for mistakes, missed or late returns during the first year of operation.

For more resources about STP, including some handy factsheets and checklists, visit the ATO Website.

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Ingrid Moyle

HR Author and Lecturer with over 25 years' experience in human resources and workplace relations in Australia. Lead Author of Instant HR Policies & Procedures, NDIS Direct Employment HR Manual, and Employee Performance Reviews: Tips, Templates and Tactics.