Understanding Single Touch Payroll (STP)

Single Touch Payroll (STP) is a reporting system introduced by the Australian government to streamline the process for reporting payroll information to the Australian Taxation Office (ATO). STP requires employers to report employee salaries, wages, PAYG withholding and superannuation directly to the ATO each time they run payroll. Learn more about STP today with this article from Alexander Bright – a trusted provider of business accounting services in Melbourne.

How Does STP Work?

Under STP, employers are required to report payroll information to the ATO each time they run payroll. This is done using payroll or accounting software that is STP-enabled. Employers can also choose to use third-party service providers such as bookkeepers to report their payroll information to the ATO.

Once the payroll information has been reported, the ATO will use this information to pre-fill the employee’s income tax returns and payment summaries, making it easier for employees to complete their tax returns.

STP also means that employers no longer need to provide payment summaries to employees at the end of the financial year. Instead, employees can access their payroll information via their myGov account.

Who Needs to Use STP?

STP is mandatory for all employers in Australia, regardless of the number of employees they have. This includes employers with only one employee, such as a sole trader or a family business.

Employers who fail to comply with STP reporting requirements may face penalties and fines from the ATO.

Benefits of STP

STP offers a number of benefits for employers, including:

• Streamlined reporting: STP eliminates the need for employers to complete payment summaries at the end of the financial year, reducing administrative burden and paperwork.
• Real-time visibility: STP provides employers with real-time visibility of their payroll information, allowing them to better manage their cash flow.
• Improved accuracy: STP reduces the risk of errors and inaccuracies in payroll reporting, as information is reported directly to the ATO each time payroll is run.
• Simplified compliance: STP ensures that employers are compliant with tax laws and reporting requirements, reducing the risk of penalties and fines.

Getting Started with STP

To get started with STP, employers will need to:

• Check that their payroll or accounting software is STP-enabled.
• Connect their STP-enabled software to the ATO.
• Report their payroll information to the ATO each time they run payroll.

Employers who need help setting up STP should contact their software provider or seek advice from business accountants in Melbourne.

Find Out More Today

STP is a mandatory reporting system introduced by the Australian government to streamline the process of reporting payroll information to the ATO. STP requires employers to report employee salaries, wages, PAYG withholding and superannuation directly to the ATO each time they run payroll.

If you’re unsure about how to get started with STP, contact Alexander Bright today. We can also assist businesses with general accounting and bookkeeping services in Melbourne.