Single Touch Payroll (STP) started applying to small businesses on 1 July 2019. Though the ATO is being accommodative during the transition, with extra time allowed to get ready.
STP is the new system for reporting payroll information – salary and wages, PAYG withholding, and superannuation – to the ATO. Large employers (20 or more employers) were meant to start using STP from 1 July 2018 (unless they have a deferred start date in place), and it has now extended to small employers (19 or fewer employees).
Though STP has been extended to all employers from 1 July 2019, the ATO describes this as a “gradual start”. With some small employers starting to report through STP, some reporting any time before 30 September 2019 and some applying for additional time.
The ATO says that small employers can start reporting “any time” between 1 July and 30 September 2019.
“If they start during this period they will be reporting on time.”
“You need to start reporting this way [using STP] by 30 September 2019 or have made arrangements with us for a later start date,” says the ATO’s introduction to Single Touch Payroll for small employers.
The ATO is maintaining to lists of STP solutions: one a list of low and no cost products for micro-employers, and another list of commercially available STP solutions.
The ATO notes that there may be circumstances where clients are not able to report before 30 September, pointing to the option to apply for an STP deferral.
There is also specific concessional reporting options for some groups, including micro-employers, closely held payees, and others.
Quarterly reporting for micro-employers
Micro-employers – which the ATO defines as 1 to 4 employees – can choose to report STP information quarterly through their registered tax or BAS agent, until 30 June 2021. There are eligibility criteria for this concession, and the agent must apply for the concession on behalf of the business by 30 September 2019.
ATO contacting clients about STP reporting irregularities
The ATO says it is contacting STP enabled employers who have ceased reporting for more than 45 days or “have submitted employees under multiple payroll or BMS IDs [ Business Management Software Identifier]”.
“These reporting errors may cause their employees to see incorrect, incomplete or multiple entries in their income statements.”
The ATO is asking tax professionals, where their business clients have been contacted by the ATO, to encourage their clients to check that their data is accurate and remind them that they must finalise their employees’ end of year payroll information before 31 July – even if employees have ceased working for them or they have dropped below the threshold for reporting”.
“If you have individual clients whose information is incomplete or incorrect, we are encouraging them to wait until their employer has finalised their STP reports before lodging their return.”