Australia has reached a new milestone in digital bookkeeping with the passing of the legislation for Single Touch Payroll reporting earlier this year (STP). Starting July 2018, companies with employee headcount of 20 or more were required to implement single touch payroll reporting through payroll or accounting systems.

And now, after months of uncertainty for small micro-businesses, Senate has passed legislation implementing Single Touch Payroll (STP) for establishments with 19 employees or less. The reforms are set for an implementation date of July 1, 2019 which gives employers an option to opt in early to this new system.

What is Single Touch Payroll?

Single Touch Payroll (STP) is a system of reporting salaries, wages, withholding tax and super information to the ATO every time a business pays its employees. Under STP, employers need to report the following items, among other things:

  1. Salaries and wages, including remuneration to the company director
  2. Deductions (e.g. workplace giving) and payments
  3. Superannuation information

Reports have to be submitted to the ATO every time you pay your staff. This can be done automatically by enabling your accounting software or payroll system to send the report to the ATO. Once you start reporting with STP, you should be able to view your year-to-date payment record through the ATO’s online services. Employees may also be able to request a copy of this information from the ATO.

Many recognised accounting and payroll programs are updating for STP reporting. If your software does not have this feature, you may have to switch to a STP-enabled software solution.

Who is included in the employee headcount?

Employers with an employee headcount of 20 or more employees on 1 April 2018 are already required to report through STP. Following the passing of legislation recently, businesses who have 19 or less employees on 1 April 2019 will also be required to participate in this system.

Employee headcount includes the following types of staff:

  • Full-time staff
  • Part-time staff
  • Casual employees who have worked any time in March and are part of the payroll as of 1 April
  • Employees who are based overseas
  • Employees who are absent or on leave (whether paid or unpaid)
  • Seasonal employees who are employed on 1 April.

Individuals who have ceased employment before 1 April, as well as casual staff who did not work in March, will not be included in the headcount. Independent contractors and staff hired through third-party labour hire, office holders, religious practitioners and company directors are also not included.

How does STP impact micro-employers?

The new legislation is understandably a big step for small businesses that may not have digitised payroll systems in place. With many micro-employers still doing payroll manually, especially in the food industry, now is a good time to embrace digital bookkeeping and stay ahead of the competition.

The ATO is in constant talks with software developers regarding the provision of low-cost STP solutions to cater to micro-employers. This includes mobile phone apps, simple payroll software and other digital bookkeeping tools that will streamline accounts processes for micro-businesses.

If you’re running a business with a staff headcount of 1-4, the ATO is also not going to require you to report STP every payroll. It offers cost-effective options such as reporting quarterly instead of every payroll run.

Please stay in contact with your bookkeeper as legislation requirements evolve.

Streamline your bookkeeping processes

STP reporting for businesses with less than 20 employees does not start until 2019 but now is the time to start thinking about what you need to do to prepare.

Restaurant Bookkeepers Australia can assist you with all your bookkeeping concerns so you can focus on keeping your kitchen cooking. Our consultants offer cost-effective solutions for complying with the new ATO regulations. Contact us for a free consult on STP reporting today..

You can also read our top tips for setting up your bookkeeping system to get started on digitising your books.

Get your software STP-enabled today! Mise en place!