Single Touch Payroll is here: Your top queries answered

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We’re fresh into the new financial year, and there’s change afoot – as of 1 July, Single Touch Payroll (STP) legislation has kicked in for all employers across Australia.

An ATO initiative to enable real time digital salary reporting, STP means employers are now required to report salaries and wages, PAYG withholding, and superannuation information, each time they pay their employees. There are multiple changes for everyone to get their heads around. But rest assured, the information is out there. In fact, we’ve gone ahead and gathered it all together for you.

The Xero team is revisiting some of the most commonly asked questions from our community – and connecting you with the answers and resources you need to stay on top of all things STP.

Why can’t I produce payment summaries anymore?

STP removes the requirement for payment summaries altogether – a change that may take some getting used to. Instead, the ATO will now make this information directly available to employees online through their individual myGov accounts, in what is called an ‘income statement’.

Completing the STP opt in process within Xero connects your business with the ATO and enables STP reporting. The date by which you’ve opted in to STP will determine how you report payroll information to the ATO for your year end payroll requirements. If you opt in to STP after 1 July 2019, payment summaries can still be produced for FY19 and the years prior. However, if you opted in before 1 July 2019, you can no longer produce payment summaries (you can still access those from prior to your opt in date) – this is in order to prevent duplicate reporting of employee information to the ATO.

Remember, you don’t need to complete the STP finalisation process before the first pay run of this year – you have until 31 July for the 2018/2019 financial year.

Where can I find out more?

Advisors and business owners:

The ATO’s Single Touch Payroll employer reporting guidelines.
To gain a thorough understanding of how finalisation declaration works in Xero, visit our article STP and finalisation: How to close out the year.
Check out the detailed list of common payroll FAQs on our EOFY page.
This informative No More Payment Summaries – STP notice from the ICB is designed for advisors to share with their clients.

Employees:

- Learn more about what STP means for your employees: What Single Touch Payroll means for employees.

What does it mean if I opted in before 1 July 2019?

Once the STP opt in process has been completed, your business should be filing pay runs to the ATO on or before the payment date of each pay run. If you’ve opted in, but haven’t been filing any pay runs since you did so, there’s no need for concern. During the first year, the ATO has said they will not pursue penalties when businesses are making the effort to do their best to comply with the law.

When you have opted in to STP, payroll year end occurs within your software – and there is no more paperwork or processes happening outside of your payroll system (STP will prefill all of your employees’ tax return information). All you need to do is complete your STP finalisation, as this will give the required end of year information to the ATO.

Again, you have until 31 July to complete STP finalisation for the 2018/2019 financial year.

How do my employees access their end of year figures for their tax return?

Employees can find their income statement within their myGov account – that’s everything they need to complete their tax return. They will be able to view this information online and also print a tax friendly report called tax print that includes all details.

Where can I find out more?

Employees:

For more information direct from the ATO, see this dedicated fact sheet written with employees in mind: The way you get your payment summary is changing.

What resources can I give employees to teach them how to use myGov?

One of the key changes that employees may notice as part of the transition to STP is that payment summaries will no longer be issued at the end of the financial year. Instead, the ATO will make information reported by an employer directly available to an employee online through their individual myGov account.

The ATO has provided the following information to help employees understand how to use and navigate myGov:

Payment summary information for employees.
This guide on setting up your myGov account.
Information on accessing your income statement online.

Is it true that the filing status can take up to 72 hours to update from the ATO?

That’s correct. The ATO references that it can take up to 72 hours to process this information for you. If, for example, you have filed a pay run but it is marked as ‘Pending’ rather than ‘Filed’, this means that it is waiting for a response from the ATO.

However, just because one of your filings is pending a response from the ATO, it doesn’t prevent you from filing another pay run or completing an STP finalisation. For example, if you process and file your last pay run for the financial year and it has a status of ‘Pending’; you don’t have to wait until that status changes to ‘Filed’ before you do your STP finalisation.

Where can I find out more?

Advisors and business owners:

The ATO references its 72 hour process time in this factsheet: Get ready for Single Touch Payroll.
If you are waiting for an extended period of time, it may be worth checking the SBR system status in case the ATO is experiencing any system issues that are resulting in longer than usual response times.

What other resources are available?

While STP is a change for many small businesses and their trusted advisors, all the information you need is out there. In addition to our Single Touch Payroll homepage, you can:

Advisors: Find all of our EOFY resources for accountants and bookkeepers.
Business owners: Find all of our EOFY resources custom made for business owners.
Watch any number of our payroll webinars on demand.
Register for our upcoming Processing end of year payroll – With STP webinar on Monday 8 July 12:00 to 12:45pm AEST.
Check out our comprehensive fact sheets on how to finalise Single Touch Payroll data and processing EOFY with STP.
Read through our in-depth content on EOFY and STP.
Visit the ATO’s STP resources page for webinars and factsheets.