Single Touch Payroll (STP) is a compliance regulation of the Australian Taxation Office (ATO) that obliges employers to send employee payroll information including wages, salaries, Superannuation, and Pay As You Go (PAYG) withholding to the ATO with their regular pay run. STP is a major change to the taxation system in Australia that has meant many employers had to replace or upgrade their payroll system in the 2019 financial year to meet their payroll reporting responsibilities.
At BYO Group, you’ll be assigned a dedicated account manager who will assist with all your accounting needs and respond to any concerns you may have.
Single Touch Payroll ATO Providers
You can send STP data to the ATO in Australia in any of the following ways:
- Use existing payroll or accounting methods
- Opt for STP-enabled payroll software
- Opt for a free or low-cost solution (for employers with one to four employees)
- Ask a third party or ATO provider to report for you (registered tax or BAS agent).
Payroll service providers must be registered as a BAS or tax agent to provide STP reporting services.
The ATO sends a notice of assessment to businesses other than companies after their tax return lodgement, which tells them how much they owe, the due date for payment and the payment reference number (PRN). Superannuation funds and fully self-assessed companies don’t normally receive an assessment notice. Partnerships and sole traders can find out how much income tax they owe via the ATO’s online services which can be accessed through a myGov account external link.
We keep a close working relationship with you to ensure you receive clear lines of communication and that all your bookkeeping needs are in good hands
ATO Payment Plan
If you are in debt with the ATO, you can opt for a payment plan. To figure out a payment plan you can afford, use the convenient ATO payment plan estimator online(3). This online service allows you to figure out how fast you can pay your tax debt and what the interest charges will be. When you’ve figured out a payment plan that suits you best, you can set up your payment plan to begin paying your tax debt. Note: You cannot use this online payment plan estimator for superannuation guarantee charge debts.
ATO Payment Options
The fastest and easiest ways to pay the ATO is with a credit or debit card, or BPAY. Every time you make a payment, be sure to provide the payment reference number (PRN) in the reference field to guarantee it goes into the correct account. You can pay using your MyGov account, the government’s EasyPay service(2) or call 1300 898 089. Other options include direct debit, in person at Australia Post, by mail, or a transfer from a bank overseas.
BYO Group has a wide network of accountants, bookkeepers, tax agents, and business professionals to assist you when you need.
ATO Payment Summary
Employers don’t have to give employees a payment summary for amounts reported and finalised through STP. However, they do need payment summaries for any payments not done through STP and for:
- Business and personal services income
- Departing Australia superannuation payment (DASP)
- Employment termination payment
- Foreign employment
- Foreign residents
- Interest, dividend and royalty payments paid to non-residents
- Individual non-business
- Natural resource payments to foreign residents
- PAYG withholding payment summary statement
- Superannuation income stream
- Superannuation lump sum
- Withholding where ABN not quoted
For a healthy cash flow, planning ahead for your income tax is essential whether you’re running your own business or earning an income from investments. If you make regular instalments during the year using PAYG payments, you won’t have a large tax bill when you lodge your tax return at the end of the financial year.
Employers help their payees to meet their end of financial year ATO tax liabilities by collecting PAYG withholding amounts from:
- Their employees
- Others such as contractors
- Businesses not supplying an Australian business number (ABN).
As an employer, you must register for PAYG withholding, check that the person you employ is allowed to work in Australia, and if you are no longer an employer, you must cancel your PAYG withholding registration.
Our professional bookkeeping services at BYO Group allow business owners to focus more on what they love doing and what they’re best at.
The ATO has an online tax withholding calculator for employers to help work out the tax they have to withhold from payments made to employees and other workers. There are two withholding calculators you can use depending on your situation:
- Calculator for tax withheld for individuals(4) – for employees and other workers, including those on working holidays.
- Calculator for voluntary agreements(5) – for contractors and subcontractors, who can use voluntary agreements.
Many people say they haven’t received a PAYG summary and want to know what they should do. Firstly, there’s no need to complete a PAYG summary if you use a tax agent and if you use myTax, your PAYG details are added automatically.
Here’s a straightforward explanation:
- Group Certificate
- Income Statement
- PAYG Summary
- PAYG Statement
These all mean the same thing.
Under PAYG withholding, every employer must supply each employee and other payees a payment summary showing what they have been paid and how much were withheld from those payments and include:
- Tax file number.
- Payment codes
- Payment amount
- Amount of tax withheld
BYO Group keep up to date with new and evolving technologies in the industry, so you’ll be consistently provided with the latest and most accurate bookkeeping solutions for your business.
With Xero Payroll, you can do your payroll anywhere and keep your business running smoothly, even while you’re out of the office. You can log in to Xero anywhere, anytime, on any device to make pay runs a breeze. With Xero payroll, your tasks are managed, your accounts are automatically updated, and you can quickly and easily file your pay runs with the ATO. Xero creates and stores payslips, does weekly, bi-weekly and monthly pay runs and deducts tax.
Xero Single Touch Payroll
Xero Single Touch Payroll is a must-have tool for sending invoices, paying staff, reporting superannuation contributions and becoming STP compliant. Xero’s simple payroll and online accounting software has your back. Becoming STP Compliant in Xero is easy. All your payroll information such as employee year-to-date payroll balances including gross wages, allowances, PAYG and Superannuation is filed and sent securely to the ATO for you. BYO Group is a registered provider that can set up payroll for you (or help you set up) and enable activation for automated lodgement with STP-enabled software.
Xero STP Finalisation
Single Touch Payroll eliminates many end-of-financial-year chores. All BAS agents and bookkeepers need do is submit ‘Finalisation Declarations’ on behalf of their clients. This informs the ATO that payroll for the financial year is complete, and the figures lodged are final.
If you’re trawling the Internet for STP providers nearby or near you, don’t scroll past the experienced industry leaders and career professionals at BYO Group for all your STP, bookkeeping and accounting needs. We’d love to hear from you if you need our services or have any questions. Call us on 0402 100 421 or complete the handy online form.