Most of the popular software programs have introduced payroll specific software for Single Touch Payroll (STP) reporting. So, it should be easy to register directly from the software.
If you haven’t already heard about single touch payroll, this is the direct reporting to the Australian Taxation Office (ATO) of your business’ salary and wages, PAYG withholding and superannuation contribution information. STP will also include payments made to the owners of the business in the form of salary, wages or directors fees.
Designed by the ATO, STP encourages businesses to report their salary payments more frequently. In fact, a report will be electronically sent to the ATO every time pay runs for their employees are completed.
Do I have to use single touch payroll?
Yes. It is mandatory for all businesses to register and report through Single Touch Payroll come 1 July 2019, regardless of the number of employees.
The Commissioner of Taxation has released a statement indicating STP can be reported anytime between 1 July to 30 September 2019. Your business can apply for a deferred start date after this however you will need to complete an online form with the ATO.
There will also be no penalties charged for missed or late reports or mistakes for the first year. This should take some of the pressure for businesses to set up their payroll accounting software for STP and create new procedures for staff to follow.
As 1 July 2019 starts to loom, it may also be wise to consider upgrading your payroll accounting software or take the opportunity to introduce a new payroll system.
How to setup Single Touch Payroll
If you outsource payroll to a third party, such as a registered agent or payroll service provider, you can ask them to report on your behalf. It is your obligation as an employer to make sure they will be reporting STP on your behalf.
If you use a registered tax or BAS agent, talk to them about your options. They may be able to report STP for you, or work with you to outsource payroll to a payroll service provider.
Alternatively, you can set up your payroll for STP yourself!
It’s easy, here’s how to set up Single Touch Payroll –
1 . Assign payroll categories
When you click on the Single Touch Payroll on your accounting software (this will be under the payroll function), the first step is to assign payroll categories.
This step asks you to assign the payroll categories your business uses so they match with the ATO payroll categories. This includes gross payments, holiday and sick pay, overtime, bonuses and commissions.
This ensures when you report to the ATO, the payments you make are understood by the ATO and are assigned correctly. Different awards and software providers have different payroll categories, so this clears up any discrepancies.
2. You will need to enter your ABN number.
This is your business’ Australian business number assigned by the Australian Tax Office. You can find this on your ATO Business portal or on your BAS forms.
3. The name of the accounting or payroll software you are using.
This should come up automatically during the STP registration.
4. Software ID
The software ID is your business’ unique number and is assigned by your software provider. This number will be automatically generated and will show on the screen. There is no need to apply for this number.
The software ID is used by the ATO to assign the information to your business (similar to a customer number) when it receives a report from your accounting or payroll software. You cannot share this number with other businesses.
TIP – take note of this number as you will need it for Step 5, when notifying the ATO.
5. Confirm you have notified the ATO
This step is important because your reports will be rejected by the ATO if not completed.
- If your accounting or payroll software is not cloud based, you will need to contact the ATO by telephone on 1300 85 22 32.
- For cloud-based accounting and payroll software, login to your ATO business portal as usual. Press on the tab Access Manager towards the bottom left hand side.
- The login details for the Access Manager are the same for your ATO Business Portal.
- Click on ‘My hosted SBR software services’, the tab is on the left-hand side.
- A new page will be displayed, click on the button ‘Notify the ATO of your hosted service’.
- Enter your accounting or payroll software providers ABN or search by their name, such as Xero, MYOB or QuickBooks. Their name should appear in the list, click on the correct name.
- Enter your unique software ID (the one provided by the accounting or payroll software when completing step 4 above).
- Click NEXT
6. To confirm you have notified the ATO properly
Click on ‘My hosted SBR software services’ and the notification status should now read Active against the name of the accounting or payroll software you are using.
For detailed information on this step, we recommend you visit this ATO page – Notify us of a hosted SBR software service
If you get into any trouble or have any questions, please call the accountants at Abdera on +61 2 8916 6259 or contact us, we would be more than happy to walk you through the STP registration process.
Tired of the time consuming, complexities of your business payroll? It may be time to outsource payroll – read how Abdera payroll services can relieve the pressure and ensure your employees are paid correctly, on time and your business is compliant with all regulations.