Breaking down Single Touch Payroll (STP)....
Closely held employers
If your business only employs family members, then STP will commence from 1 July 2020. While you still have the option to report a regular pay run under the normal STP rules, you will also have the following quarterly lodgement options:
- Report wages based on actual drawings from the business during the quarter
- Report 25 per cent of the salary from the previous year per quarter
- Vary the previous year’s amount within 15 per cent
Your annual STP finalisation can be done at the time of your tax return preparation, allowing for any adjustments to be made to your final salary.
Key Dates
- Commence STP from 1 July 2020
- Report STP data quarterly with BAS lodgement due dates
- Report 2021 annual STP finalisation with lodgement of 2021 tax return
Micro employers - 1-4 employees
If you have between 1-4 employees, then your STP reporting obligations commence from 1 July 2019, although there is an automatic deferral to 30 September 2019. You can also elect to opt in earlier if preferred. If you are currently using an up to date payroll system (such as Xero), then you will need to enable STP in Xero or your payroll system. This process involves:
- Setup of the reporting settings on your payroll items – each item will need to be linked to a reporting category provided by the Tax Office
- Enable STP in your software
- Link your software to the Tax Office
Once you commence reporting under STP, the year to date wages information is reported to the Tax Office, and so you don’t need to go back and report earlier pay runs during the year.
Micro employers will have a further lodgement concession. Rather than reporting every time wages are paid, they will be able to lodge their payroll data quarterly through a registered tax agent. This concession will be available until 1 July 2021.
If you don’t have payroll software, keep an eye out over the next few months as there will be a number of new STP compliant payroll systems available between now and September 2019. These are expected to cost around $10 per month.
Key Dates
- STP to commence 1 July 2019 (extension to 30 September 2019)
- Quarterly reporting option available to 1 July 2021
- Issue 2019 PAYG Payment Summaries by 14 July 2019
- Report 2019 PAYG Payment Summary data to the Tax Office by 14th August 2019
- If you opt in to STP before 30 June:
Small employers - 5-19 employees
If you have between 5 – 19 employees, then your STP reporting obligations commence from 1 July 2019, although there is an automatic deferral to 30 September 2019. You can also elect to opt in earlier if preferred. If you are currently using an up to date payroll system (such as Xero), then you will need to enable STP in Xero or your payroll system. This process involves:
- Setup of the reporting settings on your payroll items – each item will need to be linked to a reporting category provided by the Tax Office
- Enable STP in your software
- Link your software to the Tax Office
Once you commence reporting under STP, the year to date wages information is reported to the Tax Office, and so you don’t need to go back and report earlier pay runs during the year.
Key Dates
- STP to commence 1 July 2019 (extension to 30 September 2019)
- Issue 2019 PAYG Payment Summaries by 14 July 2019
- Report 2019 PAYG Payment Summary data to the Tax Office by 14th August 2019
- If you opt in to STP before 30 June:
Large employers - 20+ employees
If you have 20 or more employees (measured as at 1 April 2018), you should already be reporting through STP. If you have not enabled STP, please contact your advisor urgently to arrange a review of your payroll setup.
Key Dates
- STP commenced 1 July 2018
- Finalise employee’s 2019 year end by 14 July 2019 (31 July if you commenced STP after 1 July 2018)
- Finalise closely held wages through STP by 30 September 2019