What is Single Touch Payroll (STP)?

Single Touch Payroll (STP), is a streamlined reporting system for employers. This change brings about significant budget savings for employers. It’s designed to streamline reporting obligations to the ATO such as employer’s salary, superannuation information and pay as you go (PAYG) withholding.

Who does STP apply to?

STP initially applies to employers with 20 or more employees. (Note: the “employer” can be a member of a wholly-owned group, and the group has 20 or more employees in total) as at 1 April 2018.

There are some criteria around the “20 employee” headcount which includes:

• Full-time and part-time employees;
• Casual employees who are on your payroll system on 1 April 2018 AND worked any time during March;
• Employees based overseas;
• Employees that are absent or on leave (paid or unpaid);
• Seasonal employees (staff who are engaged short term to meet a regular peak workload, i.e. harvest workers).

Exclusions to the headcount:

• Employees that cease working before 1 April 2018;
• Casual employees who did not work in March 2018;
• Independent contractors;
• Company directors;
• Office holders; and
• Religious practitioners.

Once your business uses the STP system, you will be considered a “substantial employer” and you must continue to report under this system, regardless of whether your business no longer has 20 or more employees (unless the Commissioner grants it an exemption).

When does STP start?

The STP commences from 1 July 2018, however, you need to start thinking about from 1 April 2018 as you must have an accurate head count as at 1 April 2018.

 

What benefits does STP offer?

The benefits the STP offer include:

• Removing the hassle of providing payment summaries to individuals
• Removing the hassle of providing a payment summary annual report to the Commissioner
• Employers who have 19 or less employees who wish to voluntarily report under the STP can do so after 1 July 2018 (if it had not yet become a substantial employer).

How can we help?

Single Touch Payroll (STP) provides an incentive to review your current internal payroll processes and software and consider a more compliant reporting system. With everything in business, improved efficiency through a digital payroll process can only be a positive for your business.

If your business has 20 or more employees from 1 April 2018, you might need to get in touch with your Altus Adviser. This gives you approximately 3 months to organise your payroll system and procedures in order to report under STP to the ATO from 1 July 2018.