As your business transitions to the Single Touch Payroll (STP) system, part of your financial obligation is to adhere to the standards of your STP reporting. From preparing your payroll information to electronically lodging your report to the Australian Taxation Office (ATO), these steps will definitely help you get started.
1. Choose your method of reporting.
The first step is to determine how you will report via Single Touch Payroll. This may depend on how many employees you have in your business and if you presently use payroll software.
You can choose to report through an STP-enabled software by yourself or you can have a registered tax agent or a payroll service provider to report through STP on your behalf.
Note that if you have 1 to 4 employees, you have the option of a no-cost or low-cost STP solution.
2. Consult your software provider.
It is crucial to hire an efficient payroll software provider. Aside from providing STP reporting for your business, it is important that you understand the support that they will offer to assist your transition to STP.
Ask them which is the most efficient option in connecting directly to the ATO: a software ID that’s usually displayed by your software during the setup of STP set-up; a service provider that will set up the connection to ATO for you; or through a machine credential installed on your device.
Also, remember to upgrade your software and subscribe to any communications they offer such as newsletter and social media updates.
3. Discuss STP with your employees.
Aside from talking to the people responsible for your business’s payroll, talk to your staff as well about STP. This is to establish clear communications about the brand of your business and especially in maintaining correct information about their salary and wages.
This discussion also presents a good time to correct any errors in payroll such as misspelled addresses, wrong birth dates and overpayments.
4. Choose carefully who will authorize your STP reports.
Before sending your first STP pay event report, you have to choose a reliable person to help you send it. As the business owner, you are already authorized to send STP reports.
If you opt to have your public officer or your payroll manager submit the report, you will need to give them the authority and record the authorization in your payroll software.
However, if you prefer to have a registered tax agent or payroll service provider to report on your behalf, you need to link them to your account at the ATO. Authorization is also required for each pay event they lodge.
5. Start your STP report and make sure your information was sent properly.
Before sending your STP report, make sure the payroll information that you recorded are all correct. After sending your STP report, it is recommended that you check your software for ‘successful’ status. This means that the ATO has received your file.
You may also consult your software provider on the method of alerting you for any reporting errors, where to find and how to fix the errors.
If there were any reporting errors, immediately correct your pay event report by signing in to the business portal to view your lodged STP reports. It may take up to 72 hours to update your report with the new changes.
6. Apply for more time if you need it
For small employers (employers with 19 or fewer employees), you will be required to apply for a deferral if you feel you are not ready to start reporting. If you meet the criteria, you can also apply for an exemption.
For employers who have closely held payees, you don’t need to apply for a deferral because you are exempted from reporting via STP until 30 June 2020. Thereafter, business owners will have the option to report these payees on a quarterly basis.
For employers with 20 or more employees, they are required to report through STP from July 1, 2018, or they should have a deferral in place.
What these changes mean to you
The switch to this new payroll system enables businesses of all sizes to adapt to the guidelines, making their information and pay processes streamlined and easier.
Hopefully, the detailed steps will guide you as you prepare your STP report. At first, applying these changes will feel bizarre but as we get used to it, we’ll be more than grateful for the strategic rules mandated by the government to better our business and lifestyle.
An author of Namaste UI, published several articles focused on blogging, business, web design & development, e-commerce, finance, health, lifestyle, marketing, social media, SEO, travel.
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