Have you taken the next step and started reporting through Single Touch Payroll (STP)? Employers with 20 or more employees should have already started reporting their employees’ salaries and wages, pay as you go withholding and superannuation information to the ATO through an STP-enable payroll solution.
If your business employs 19 or fewer employees, you will be required to join the more than 91,000 businesses currently reporting through STP from 1 July 2019.
If you are already reporting through STP, most of the work is already done. However, you’ll need to let your employees know some key information.
What do employees need to know about STP?
For the most part, STP is only a change for employers in the way they report to the ATO, however, as part of the digitisation, employees may no longer receive payment summaries at the end of financial year.
While you no longer have to give your employees a payment summary, you may choose to still provide one. You should tell your employees if you won’t be giving them a payment summary, and let them know that they can access this information in their ATO online account through myGov.
We will provide notifications through ATO online accounts via myGov when income statements are ready for tax agents to complete a tax return. The way tax returns are lodged won’t change, regardless of whether they are lodged by an individual or an agent.
How will STP help employees?
STP reporting means the ATO can now better support you in meeting your employee entitlements by flagging any instances where superannuation may not have been paid. This will increase transparency for millions of Australians around their year-to-date tax and superannuation information in near real-time through ATO online accounts via myGov, helping Australians take more control of their current financial situation and retirement planning, and helping you manage any challenges in meeting your obligations.
It’s not compulsory for employees to have a myGov account, but they won’t be able to see their information online without one. Fortunately, it’s easy to setup and manage a myGov account if they don’t have one and the account can now be accessed using a mobile number or email address to sign in.
We understand that employers pay superannuation contributions at different times, but it is important to remember that you must pay at least quarterly. Your employee’s superannuation fund will let us know once a payment has been made.
What do you need to do?
If you are reporting through STP, you should take the following steps:
- Tell your employees if you won’t be giving them a payment summary, and let them know that they can access this information in their ATO online account through myGov.
- Finalise your STP reports as soon as you can, but no later than 31 July. You can amend this information at any time if you find an error.
- When you make the finalisation declaration, your employee’s information will display as ‘Tax ready’ in ATO online via myGov.
- You no longer need to lodge a payment summary annual report (PSAR) for information you have reported and finalised through STP.
- If your agent normally helps you finalise your end of year employee reporting, for example payment summaries, make sure they know that you have started STP reporting if they aren’t already aware.
- You will still need to give employees a payment summary for any amounts not reported through STP, for example employee share schemes.
By John Shepherd, Assistant Commissioner, Australian Taxation Office