No, it’s not contagious. It’s not even medical!
STP = Single Touch Payroll and like most acronyms, it lacks something in the explanatory detail stakes.
It was birthed out of the ATO and while it sounds like it offers a short cut, in reality payroll remains as complicated and full of pitfalls as it always has been.
STP is about providing wages, tax and superannuation details to the ATO on a progressive basis at each pay run. There will be no further need to produce Payment Summaries (formerly a long time ago Group Certificates) at the end of the financial year. Employees can access their details through their myGov account.
So what lies between the S, the T, and the P?
First, a small potted history.
If your business has more than 19 employees, you’ve probably been using STP since July 2018. From July 2019, it is the turn of businesses with fewer than 20 employees.
If you have fewer than 5 employees, there are additional options as there also are for closely held employees ie family members, directors and shareholders, and trustees and beneficiaries.
“But I use an Excel spreadsheet and a wages book!”
You can continue to use the Excel spreadsheet or talk to a bookkeeper or your accountant about having a bit of an upgrade. The wages book can still be used as the basis for calculating wages paid and issuing payslips. However, there is now another step in the wage cycle process and, if you have 5 or more employees, you may need to look seriously at cloud accounting solutions which include payroll.
In the next month or so, a number of no-cost or low-cost (under $10 per month) online Single Touch Payroll solutions will become available for micro employers with fewer than 5 employees. Think of the expense as offsetting having to hand write (or getting someone else to hand write) Payment Summaries by 14th July.
There are specific steps to follow in setting up for STP and most accounting packages provide these details. After all, they don’t want to lose you as a customer to someone else who appears to offer a more ‘user friendly’ option.
Contact your bookkeeper or accountant for assistance in regard to STP (or anything else for that matter) and, by the end of July, you will have forgotten about any hassles in getting past STP.