Single Touch Payroll (STP)What does it mean and how will it impact your business?
What is Single Touch Payroll (STP)?
Simply put, Single Touch Payroll (STP) means that Salaries and Wages, PAYG and Superannuation information is reported to the Australian Tax Office directly from your payroll software. For companies employing 20 or more employees (‘substantial employer’), Single Touch Payroll reporting will start from July 1, 2018. This will be optional for companies employing less than 20 employees, however, it may become mandatory from July 1, 2019, pending legislation.
What does this mean for employers?
You will be able to continue with your current pay cycles. Upon completion of each payment, the relevant payment information (Salaries and Wages, Allowances, Deductions (e.g. Workplace Giving), other payments, PAYG and Superannuation information) is reported to the ATO.
To find out if you need to be ready by then, you will need to do a headcount of the employees you have on your payroll on 1 April 2018.
This will require your payroll software to be updated for Single Touch Payroll reporting. MYOB investing heavily in Single Touch Payroll and actively working with the ATO to ensure all MYOB payroll products (MYOB Essentials, MYOB AccountRight, MYOB PayGlobal, MYOB Greentree, MYOB Exo Payroll, MYOB Advanced People) are Single Touch Payroll compliant from July 1, 2018. Although the Payroll reporting system became compulsory for many businesses in July, many still aren’t using STP. Find out more on what will happen if you still aren’t using STP.
What will this mean for your employees?
Employees will be able to view up-to-date information through their myGov portal, including year-to-date pay, tax and superannuation information. By reporting this information to the ATO via Single Touch Payroll, employers will not have to provide employees with PAYG Payment Summaries as the information will be available via myGov.
Where can I find out more information about Single Touch Payroll?
More information is available from the ATO’s website. Kilimanjaro Consulting will keep their clients updated as new information becomes available from the ATO as well as product updates from MYOB.
Single Touch Payroll – Phase 2
Single Touch Payroll Phase 2 expands how the Australian Taxation Office (ATO) collects and administers information from employers on behalf of other government agencies, such as Services Australia. This has two major benefits:
- It simplifies reporting obligations for employers. For example, you will no longer need to send an Employment Separation Certificate to Centrelink.
- Government agencies that use STP data will respond more quickly in their services.
MYOB Advanced users can choose when to enable STP Phase 2 reporting. In MYOB Advanced version 2021.1.403, STP Phase 2 is turned off by default and you can still use existing STP Phase 1 workflows. For MYOB Exo Employer Services users your software version will need to be upgraded to at least 2021.9 to be compliant with STP Phase 2.
For an overview of these changes, please visit our Training Portal.
Please note: MYOB Exo Employer Services will not have an in-application upgrade for this release. You will need to download and install it manually. Therefore, some manual configuration will be required. For this reason, we recommend you schedule the upgrade at least 2-3 days before your next pay, so there is enough time to finish everything before you submit your next STP payload. Click here for more information about this download.
The best time to enable STP Phase 2 is when:
- No pay runs are being processed.
- You have enough time to review and update your employees and pay items.
To ensure you are fully prepared for the upgrade you are encouraged to familiarise yourself with Single Touch Payroll Phase 2 and what you can expect from the new version. Articles with everything you need to know have been made available on the MYOB website here to ensure you are well prepared for the next steps.
What’s changing for you with Single Touch Payroll Phase 2?
A software release began rollout in mid-April to help ensure your current MYOB payroll software is STP Phase 2 compliant. Your trusted MYOB Advanced Payroll consultant will email you when the latest version is available for you to update.
There are some important steps you will also need to undertake to be STP Phase 2 compliant. This includes:
- Update your configuration as per the customer guide
- Complete the STP Phase 2 readiness checklist after your upgrade to review the changes
- Report each pay run to the ATO (same as you normally would)
What isn’t changing with the new Single Touch Payroll?
Despite additional information being required in your STP Phase 2 report, there are many things that stay the same, such as:
- The way you lodge your STP report
- STP reports are still due on or before payday unless you are eligible for a reporting concession
- The types of payments that are in scope for STP reporting
- Taxation and superannuation obligations
- End of year finalisation requirements.
Booster takes advantage of modern, cloud-based payroll software
Booster decided that they needed a new system to streamline their payroll processes and better support their organisation’s growth. As their trusted and experienced implementation partner we were able to offer early access to New Zealand’s newest payroll specific module of MYOB Advanced – MYOB Advanced Payroll. Booster now leverages both MYOB Advanced Business and MYOB Advanced Payroll in one integrated system and the team is not looking back.
Read more about their efficiency improvements following their MYOB Advanced Payroll Implementation here.
MYOB Single Touch Payroll – FAQ
What is Single Touch Payroll (STP)
Single Touch Payroll (STP) is a new way for a business to report their employees’ payroll information such as Salaries and Wages, PAYG and Superannuation directly from the payroll software to the Australian Tax Office. As a result of Single Touch Payroll, businesses will no longer be required to complete payment summaries at the end of the financial year as the reporting will have already been done and available to employees through myGov.
Single Touch Payroll (STP) will be mandatory from July 1, 2018, for businesses with 20+ employees, and July 1, 2019, for all businesses.
What will change for employees?
Single Touch Payroll (STP) will allow employees to access their tax and superannuation information, such as their payment summary, through their myGov portal, If your employer does not run Single Touch Payroll, they will still be required to send through regular payslips.
What is expected of employers?
Employers will have to establish how many people are employed by your business on April 1st, 2018. If your business has 20 or more employees on this date, you will need to upgrade to a payroll system that supports Single Touch Payroll by July 1, 2018.
Companies with 19 employees are also now required to report through STP according to the passage of legislation from July 1st, 2019. Employers will run Single Touch Payroll under a Standard Business Reporting-enabled software which enables reporting of payroll and superannuation information electronically, at the same time that their employees and superannuation funds are paid. Employers are required to upgrade their existing payroll software to satisfy the Single Touch Payroll standards.
How can employers smoothly transition into STP?
Once the above steps have been completed, employers must consider when and how they should transition into Single Touch Payroll. An employer has the option to begin using Single Touch Payroll now, which means some employers could be completing their EOFY processes in a quicker, more efficient way. When an employer starts using Single Touch Payroll, the system will submit existing YTD amounts of both current and inactive employees in their first submission.
What will change with STP?
For employers, Single Touch Payroll will ensure your business is compliant with the ATO’s new reporting requirements. The new system allows employers to report data correctly through the ATO with no added work. For payroll software providers, Single Touch Payroll provides a simple way to incorporate the new system into the existing one with no extra cost.
Does my software support STP?
MYOB Exo Employer Services is going to support Single Touch Payroll by providing a specific workflow. MYOB is readily equipped and plans to improve current reporting functionality to support the submission of Single Touch Payroll reports directly to the ATO. Single Touch Payroll “pay events” will become readable to support the review of data as part of the submission process.
MYOB Advanced Payroll also supports STP. By enabling STP, salaries and wages, PAYG and superannuation information is reported directly to the ATO at the time of each payday and this saves time at the End of the Financial year. It is no longer necessary to provide PAYG Payment Summaries; the information will already be available for your staff through myGov. Overall, this reduces the number of interactions with the ATO as well as reduces the duplication of data.
MYOB is well prepared to integrate Single Touch Payroll functionality and submitting data directly to the ATO will become a simpler, secure and automated process. MYOB plan to have Single Touch Payroll functionality ready from April 2018 for an initial rollout to a limited set of pilot customers. An Exo Employer Services Product Upgrade will be available from June 2018 for those considering an early upgrade.