What is Single Touch Payroll? Do's and Don'ts

Ever asked what is single touch payroll? Chances are that you have. Single Touch Payroll (or STP as it is known) is something that you definitely came across if you run a small business in Australia, so learn more about what it is and also the benefits of STP too.

What is Single Touch Payroll? 

The best place to start is by learning more about what Single Touch Payroll actually is? STP is a way of reporting employee wages tax and superannuation owed to employees to the Australian Taxation Office (ATO) as well as keeping track of your employee's payroll details. In order to use STP reporting efficiently you need to have a Single Touch Payroll enabled software that will allow you to report key pieces of employee information such as salaries, wages, pay as you go (PAYG) withholdings and super liability information.

You don’t need to do anything additional to what you normally would, you simply run your payroll, pay your employees and then give them a payslip. Just like you normally would. Then, through your accounting software, file / lodge the information directly with the ATO. Xero Accounting software makes this easy. Xero experts can steer you in the right direction.

Why should I be using Single Touch Payroll? 

Well, the short answer is STP is mandatory for all businesses with employees. Initially, Australian businesses with more than 20 staff were required to use Single Touch Payroll. Starting from 1 July 2019, businesses with even one staff member (part-time, full-time, seasonal, casual, absent or overseas) are required to use Single Touch Payroll. 

The great thing about STP is that it is incredibly easy to use. You don’t need to add in any extra steps to your payroll run, you don’t need to enter any additional information and you don’t need to change the frequency at which you pay your staff. 

The information that you provide within the STP software will be sent over to the ATO and will then be stored against your business. Your employees can see their tax information through their myGov accounts. 

At the end of the year, when it is time to report on your financial year and declare your taxes, all the information that you need to provide will already be within ATO online services. You will simply just need to finalise the information that is stored and then agree that you wish to make your declaration using the details already provided. 

As you can see, apart from being mandatory, Single Touch Payroll is hugely useful for your small business. Why not learn more about small business single touch payroll as well as the STP requirements that can really help your business to run the best that it can? Give us a call and get a free consultation session about Australian payroll services we offer for small businesses.