Let’s tackle STP together!

Single Touch Payroll (STP) is part of an Australian Government initiative to reduce red tape and streamline how employers report tax and super information. STP will be compulsory for all employers with 20 or more employees from 1 July 2018.

What it means for you

From 1 July, you will need to report your employees’ tax and super information to the Australian Tax Office (ATO) at the same time you pay them (this includes payments made to super funds). You will need to use a payroll software solution that is STP-compliant.

What it’s designed to achieve

STP is designed to simplify the reporting process for employers. By paying your employees at the same time you report to the ATO, you can take care of your payment and reporting obligations in a ‘single touch’ instead of it being a separate process.

You can read more about STP and how it works on the ATO website.

How you can prepare for STP

Ask yourself or your payroll provider the following questions:

1. What is your solution for STP - will you be reporting directly to the ATO for employers or providing another method such as uploading a file through a gateway provider?
2. When do you believe a solution will be available?
3. Have you received a deferral for STP compliance or will you be receiving one in the future?
4. If so, what date does this deferral extend to?
5. Will your solution create new costs for your business?

Most employers will not be STP-ready by 1 July. The good news? Many payroll providers have already applied for a deferral period for all their users.

Making the transition

If you make a mistake during reporting, don’t panic – you can correct any errors you make in the next STP report. You won’t have to pay a penalty for a late report during the first 12 months of compulsory STP either, unless the Commissioner gives you written notice advising otherwise. 

Other things to consider

• You do not need to ‘register’ for STP – the ATO will be notified when you lodge your first report using an STP-compliant payroll solution;
• There will be no change to employer pay cycles, due dates for remittance of Pay As You Go (PAYG) withholding to the ATO, or payment of Superannuation Guarantee (SG) contributions;
• You will no longer need to report PAYG in your activity statements or employment payment summaries at the end of the year; and
• Your employees will be able to log in to myGov to view their tax and super information in real time.

1 July is just around the corner, so make sure you stay in regular contact with your payroll provider. You should be notified when your solution is ready. 

How we can help

LGIAsuper’s Relationship Managers can brief your further on the impacts of STP. We have been talking with major payroll providers in the local government space and can answer any questions you may have.

Head of Relationship Management, Ben Moles – 07 3244 4397
Relationship Manager, Ami Schwarz – 07 3244 4392
Relationship Manager, Darren Cali - 07 3244 4334
For all other enquiries, please email employers@lgiasuper.com.au