Single Touch Payroll

Single Touch Payroll is a new regulation that changes when and how small businesses report payroll activity to the Australian Tax Office (ATO).

Businesses used to report this information to the ATO once a year. Now, they need to send a report after each pay day. And those reports must be submitted digitally, using a very specific format.

Changes to when you report payroll

Small businesses used to finalise their payroll records at the end of the financial year and produce:

a payment summary annual report for the ATO, stating how much the business had paid in salary or wages, the PAYG withheld, and some superannuation contributions they’d made
a payment summary for each employee, stating what each employee received in wages or salary, the payroll taxes collected from their pay, and some superannuation contributions made on their behalf

With STP, the payment summary annual report and the payment summary will go away.

No more payment summary annual reports

Because you’ll be updating the ATO on a pay-by-pay basis, you won’t need to prepare a payment summary annual report anymore. You’ll just let the ATO know when you’ve made your last pay run of the financial year for your employees.

No more employee payment summaries, either

Payment summaries won’t need to be sent to employees anymore, so employers won’t be required to produce them. The ATO will use Single Touch Payroll reports as the sole record of salary/wages paid, taxes collected, and superannuation contributed.

Your employees will be able to see the information that would normally be on their payment summary by logging on to myGov.

Payment summaries will be a thing of the past. Employees can find their pay-to-date information online.

You’ll need to report payroll online

There’ll be no more paper forms for reporting your payroll activity to the ATO. You’ll need to submit the information online, using a specific format known as SBR (Standard Business Reporting). Depending on how you do payroll now, you may need to change software or find a service provider who can produce compliant reports for you.

When is the Single Touch Payroll deadline?

Businesses with fewer than 20 employees will need to report through single touch payroll any time before 30 September 2019 - this is a gradual transition, and not all employers will start reporting at the same time. Businesses with more than 20 employees switched to single touch payroll on 1 July 2018.