In today’s fast-paced world of finance and business, staying on top of payroll obligations is crucial for small businesses. RV Advisory Group Pty Ltd understands the importance of efficient payroll management. In this blog, we’ll delve into the realm of Single Touch Payroll (STP) and how it can benefit small businesses. Whether you’re in Melbourne, Sydney, Perth, or anywhere else in Australia, STP is a mandatory reporting requirement that can streamline your payroll processes. Join us on this journey as we simplify STP, highlighting its key concepts and advantages to help you navigate this essential tool seamlessly. Get ready to unlock efficiency and compliance in your payroll reporting with our comprehensive STP guide.

What is Single Touch Payroll (STP)?

Single Touch Payroll, often abbreviated as STP, is a mandatory reporting system introduced by the Australian government. It revolutionizes how businesses report their payroll information to the Australian Taxation Office (ATO). Employers send payroll data to the ATO each time they pay their employees, directly from their payroll or accounting software, eliminating separate year-end reporting.

Who is required to Use Single Touch Payroll?

As of July 1, 2019, all businesses in Australia are required to use Single Touch Payroll, regardless of their size, including small businesses with one or more employees.

Where is Single Touch Payroll Method Used?

STP is used throughout Australia by businesses in various industries, regardless of location or sector.

Single Touch Payroll (STP) Obligations for Small Businesses

  • Reporting Payroll Data: Under STP, small businesses must send the following information to the ATO with each pay cycle:

    • Employee’s salary and wages including director fees
    • Pay-as-you-go (PAYG) withholding
    • Superannuation contribution amounts
  • Finalization Declarations: At the end of the financial year, employers need to make a finalization declaration. This report includes the employee’s income statements, also known as group certificates. It’s essential to ensure this data is accurate and reconciled before submitting it to the ATO.
  • Payroll Software Compliance: Small businesses must use STP-enabled payroll software to fulfill their obligations. This software automatically sends the required information to the ATO each pay cycle. Tax accountants can help businesses select and implement the right software.
  • Employee Onboarding: When a new employee is hired, their details must be accurately entered into the payroll system before the first payday. Tax accountants can assist businesses in setting up proper procedures for onboarding and data entry.
  • Superannuation Compliance: Small business owners need to ensure that superannuation payments are made on time and accurately reported through STP. This is crucial for avoiding penalties and ensuring employee entitlements are properly managed.

What is an STP Employee Summary?

The STP Employee Summary is a crucial component of the Single Touch Payroll system, providing:

A breakdown of each employee’s income, tax withheld, and superannuation contributions for each pay period.

Accessibility to both employers and employees through their respective myGov accounts, ensuring transparency and accountability in payroll reporting.

ATO’s Reporting Rules for STP:

The ATO’s reporting rules for STP include the following key points:

Real-Time Reporting: STP is designed for real-time reporting, and it replaces the need for separate reporting of Pay-As-You-Go Withholding (PAYGW) and Payment Summaries. Reporting is done directly through your STP-enabled software.

Superannuation Reporting: Employers must also report their superannuation contributions information through STP. This helps ensure that super contributions are accurately recorded and match the contributions made on behalf of employees.

Accurate Employee Data: It’s crucial to maintain accurate employee data in your payroll system. Any changes in employee details should be promptly updated in your STP-enabled software to avoid errors and compliance issues.

Reporting Deadlines for STP:

Reporting deadlines for STP are aligned with each pay cycle. You should report the required information to the ATO on or before your employees’ payday. This means that you need to report employee earnings, PAYG withholding, and superannuation contributions in real time with every pay run.

Payments made to closely held payees may be eligible for concessional reporting i.e reporting quarterly.

The end-of-year finalization declaration must be made by July 14th of each year. It’s important to reconcile and finalize all payroll data for the financial year before submitting this declaration.

Failure to meet these reporting deadlines can result in penalties and non-compliance issues, so it’s essential to stay on top of your reporting obligations.

How RV Advisory Group Pty Ltd Can Assist Small Businesses

We, at RV Advisory Group Pty Ltd, play a vital role in helping small businesses navigate the complexities of STP. Here are some ways we can assist you:

STP Software Selection: Assist businesses in choosing the right STP-enabled payroll software that suits their needs and budget.

Implementation and Training: Help our clients implement the chosen software and provide training to ensure they can use it effectively.

Data Accuracy: Review payroll data regularly to ensure accuracy and compliance. This includes checking employee information, PAYG withholding, and superannuation contributions.

Year-End Finalization: Assist businesses in finalizing STP data at the end of the financial year, ensuring accurate income statements for employees.

Compliance Monitoring: Keep your clients informed about changes in STP regulations and deadlines, helping them stay compliant.

Single Touch Payroll has become an integral part of payroll management for all businesses in Australia. RV Advisory Group Pty Ltd – in Melbourne encourages businesses to embrace STP for its efficiency, accuracy, and compliance benefits. If you have any questions or need assistance with implementing STP in your business, feel free to contact us at (03) 9424 2774 or email us at reetika@rvag.com.au. Make the smart move towards simplified payroll reporting with Single Touch Payroll and RV Advisory Group Pty Ltd!