Single Touch Payroll (STP) is on its way and many small business owners are still asking what it will mean for them. We’ve covered a few questions already in our blog article Busting the Single Touch Payroll Myths.

The final rollout of STP is less than two months away. From 1 July 2019 small businesses who employ fewer than 20 employees will also need to report via STP.

To help you stay on top of STP implementation issues, we’ve focused this article on answering questions on reporting requirements.

Q: What reporting categories does STP have?

A: STP has the following reporting categories: mandatory, voluntary and cannot be reported. These categories cover any payments, tax and super information each time you pay your staff.

Q: What kind of information is sent with STP?

Mandatory reporting includes data on withholding payments that are usually reported via your payroll system. Regular reporting of payments made to employees via STP throughout the year means that you won’t need to provide the corresponding payment summaries to your employees anymore.

Instead payees can access this information online through a myGov account. However, you must complete a finalisation declaration that states you have provided all required information for the financial year through your STP reporting.

Voluntary reporting can include certain withholding payments in your STP reporting, such as business and personal services or a payment for termination of employment income, that can help you streamline your reporting. It will eliminate the need to having a number of separate reporting processes running and help you achieve efficiencies of real-time reporting.

The Cannot be reported category includes compensation, sickness or accident payments and superannuation lump sum payments, to name a few common payment types.

For more definitions and details on Single Touch Payroll employer reporting guidelines visit the ATO website.

Q: Do you need to report contractor payments?

Payments made to contractors are not mandatory under STP, but can be included in voluntary reporting.

Q: What about BAS, is it still required?

A: YES. businesses still need to submit a BAS. Most cloud accounting payroll software providers have this covered and STP data will show up in BAS and IAS as usual, provided it is set up properly.

Q: Do FBT, ETP and RESC need to be reported via STP?

These are payments which can be included in the STP voluntary reporting category.

Q: Do I need to provide payment summaries?

A: Only if you have NOT been reporting via STP throughout the year.

Q: What happens if there’s a mistake?

Once your payroll system is linked up with STP there are options to correct a mistake. Your payroll operator can revert the pay run, make your required changes, post and lodge again

They can also complete an unscheduled pay run or fix the mistake in time for your next pay run.

Q: Will I need to file part year information if I don’t start STP at the beginning of the financial year?

A:  You only have to start lodging information from when you opted into STP.

Q: What type of business must report via STP?

A: Many tradies who operate as sole traders are unsure how this would affect them.  STP affects anyone who runs a payroll. It doesn’t matter if you are a sole trader, company etc it’s based on whether you are registered for PAYG. However, If your business structure is set up as a family trust, STP won’t affect you.

Where to from here?

STP is one of the biggest reform projects the ATO has undertaken since the introduction of the GST. At some point in the future, it will affect most employers in Australia. The best thing you can do right now is to talk to your bookkeeper or accountant who can help you understand exactly what this means for your business, ie what you need to do to make sure your company will be compliant with this legislation.

Get started today and contact us for a FREE STP Compliance Check to find out if you are ready for the Single Touch Payroll.

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