Single Touch Payroll
Starting from 1 July 2019 Single Touch Payroll (STP) will be mandatory for all employers in Australia with 19 or fewer staff members. The ATO now requires businesses to digitally report salaries and wages, PAYG withholding, reportable employer super contributions, fringe benefits tax, superannuation payments and employment termination payments to the ATO at the same time the employer runs their payroll.
The ATO announced that 'closely held employees' will have an exemption for one more year meaning they will start STP from 1 July 2020. The ATO defines 'closely held employee' as "one who is a non-arms length employee or who is directly related to the entity from which they receive payments, including family member of a family business, directors of a company and shareholders or beneficiaries." The ATO is considering quarterly options for closely held employees and we will be in contact with more details as they become available.
For employers already using Xero payroll, STP is available through your current subscription. For small business with micro employees (1 to 4 employees), a low cost solution has been developed. Xero has introduced a $10 per month fee for STP designed for the 400,000 micro business in located in Australia. Providers with a low cost system can be found here.
Employers with 20 or more employees should already be reporting their wages using STP. For our previous newsletter about STP see here.
If you're unsure where to start, or would like to know more about the low cost application to support the STP functions please contact our office.
For steps on how to report STP to the Australian Taxation Office see here.
For further information about STP (including guidelines and information) see here and here.
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This Newsletter, of necessity, has dealt with matters of a technical nature in general terms only. Clients should contact us for detailed information on any of the items in the Newsletter. No responsibility for loss occasioned to any person acting or refraining from acting in reliance upon any material in this Newsletter can be accepted by any member or employee of the firm.