payroll

Unpaid Pandemic Leave

BAS Agent's Blog, COVID-19, Payroll & Superannuation / By / / , , / 2 minutes of reading

As per Fair Work, some employees will be entitled to unpaid pandemic leave from 31 December 2021 to 30 June 2022. This affects 74 awards – see this list to check if your workplace is affected.

But what is unpaid pandemic leave and how should it be used?

What is unpaid pandemic leave?

If an employee is prevented from working because he has to self-isolate as directed by:

  • government or medical authorities or his doctor, or by
  • enforceable government directions placing restrictions on non-essential businesses,

he will be eligible for up to 2 weeks’ unpaid pandemic leave. 

What do I need to know about unpaid pandemic leave?

  • Full-time, part-time and casual staff are eligible.
  • Paid leave does not have to be used before pandemic leave is taken.
  • All staff can take the 2 whole 2 weeks leave - it is not pro-rated for staff who do not work full-time.
  • Unpaid pandemic leave does not affect other types of leave, paid or unpaid.

My employee wants to take unpaid pandemic leave. What should I do?

Your employee needs to advise you when they will take the leave (even if it’s already started) and the reason they are taking it. He should do this via email so that you both have written evidence as to when the leave was taken. The employee should indicate how long he will be absent from work. You can ask your employee to provide evidence that shows why they took the leave, such as a medical certificate. Note, if your employee is actually ill from Covid-19, then he/she may benefit from taking paid personal leave instead. In this case, you could ask for other evidence such as a positive PCR or a Rapid Antigen Test reading.

Go to this Fair Work page for further information.

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Transitioning to STP Phase 2 – Planning Ahead

BAS Agent's Blog, Payroll & Superannuation, Single Touch Payroll / By / / , , , , / 3 minutes of reading

This is the final blog in a four-part blog series about STP Phase 2. In part one of this blog series, we looked at the benefits of phase 2, then, in part two, we outlined which software providers are ready for STP 2 now. Part three in the series delved deeper into the technical side of STP Phase 2. This final blog will focus on the sorts of things employers or their bookkeepers can do now, in order to plan ahead for a smooth transition to STP Phase 2.

STP Phase 2 will require employers and/or bookkeepers to firstly understand how it will change payroll, and secondly, the specific changes they need to make to their own payroll. It can be overwhelming and confusing, to say the least! The main thing to remember is that your payroll provider will do most of the heavy lifting in terms of creating the infrastructure needed to facilitate STP 2. Your job is to understand the terminology and how the new reporting requirements apply to your payroll setup and your employees/payees. This may take some time, and thankfully, time is on your side, given the ATO has provided a blanket deferral until 1st March 2022. Also, several payroll providers have attained a much longer deferral which also covers their customers.

The best thing you can do is to start to review your current payroll setup. Check employees’ details both personal and payroll-related. I have created a spreadsheet you can use to review your current employees/payees which you can download and use as needed (see below). This spreadsheet will collate most of the information you will need in order to transition to STP 2. Start the process by completing the spreadsheet and then, when you are ready to transition, you will have most of the required information at your fingertips. 

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Employee Review Worksheet for STP Phase 2

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Next, sit down with your employees/payees and explain what will happen once STP 2 begins. Tell them about how their information will be shared with the ATO and Services Australia. Explain that their payslips and income statements will look different and why. You may need to ask payees for more personal information during the setup of STP 2 – try to get ahead of the game and find out what sorts of data you don’t have and work with your payees to obtain it.

Keep an eye on your payroll provider’s pathway to STP 2. Your provider will advise you when you can transition and how it is to be done within the software itself. This may not happen for some months, but you can still prepare as per my above tips!

Lastly, think about when you would like to transition to STP 2. Yes, there are time constraints as per the ATO but they do say you can move over at any time during the year (provided you are covered by a deferral). However, you may like to put a plan in place and decide on a cutover date. That way, you can work towards the move to STP 2 in a timely manner and in a fashion that works for you and your business.

Lastly, to help you with your STP 2 plan and research, the ATO has created a set of guidelines for employers (see below). Download it and pop it away for use when you are ready to transition (or start your research now). Remember, don’t panic! There’s plenty of time and there will be a lot of help available to you when the time comes to tackle STP Phase 2!

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ATO Guidelines for STP Phase 2

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STP Phase 2 – Getting down and dirty

BAS Agent's Blog, Payroll & Superannuation, Single Touch Payroll / By / / , , , , / 4 minutes of reading

This is the third blog in a series about STP Phase 2. The first blog looked at the benefits of STP Phase 2 and the second one outlined which software providers are ready for the changes now. In this blog, we’ll get down and dirty and cover the detail behind STP Phase 2:

  • What is it?
  • When does it start?
  • What is changing?
  • How payroll is changing and what it will look like - getting technical!

What is STP Phase 2?

Basically, STP Phase 2 is the same as STP Phase 1 except that more payroll data now needs to be reported. STP 2 requires drilling down into the details about your payees, their payments, PAYG withheld, and superannuation. These extra details will be shared with the ATO and Services Australia, providing them with greater visibility about your payees and you, as an employer.

When does STP Phase start?

The start date is 1st January 2022, however, the ATO has issued a blanket deferral to all employers who may not be ready (or their software provider isn’t ready) to the 1st March 2022. See our second blog in this series to see if your software provider has a deferral in place that extends your start date beyond 1st March 2022.

What is changing?

While the overall process of transferring your payroll data to the ATO via STP is not changing, there are some specific attributes of the process that will change. These are listed below:

  • Reporting of income types and country codes - see graphic below.
  • Disaggregation of gross income - you will be required to report more detail about income including gross, allowances, paid leave, overtime, bonuses and commissions, directors' fees and salary sacrifice.
  • New fields to replace Tax File Number Declaration services - while you will still need to retain a copy of the employee's TFND, you will no longer be required to send a copy to the ATO as data relating to the TFND will be transmitted at each and every pay event.
  • Lump Sum E by financial year - If you need to make a Lump Sum E payment (back payments more than 12 months old), you won't need to provide a Lump Sum E letter to your employee as it will be included in the STP report.
  • Adding new cessation type reason - because the date and reason for employment cessation will be in the STP report, you will no longer need to complete and provide separation certificates to employees.
  • New Child Support Agency deduction and garnishee – Child Support deductions and/or garnishees will be reported via STP reducing the need for you to send separate remittance advice to the Child Support Registrar.
  • Transferring payee year-to-date amounts – if you change software type or an employee's payroll ID number, this will be reported via the STP report. This will help avoid duplicate income statements appearing in employees' myGov accounts.
  • Separately reporting salary sacrifice - you will be required to report the pre-sacrificed income as well as the amount of salary sacrifice.
Income Types and Country Codes

What will payroll look like under STP Phase 2?

As you can see from the list above, the types of data you will report via STP 2 will change. Specifically, there is more data required than that reported via STP Phase 1. In order to report this extra data, your payroll needs to be set up correctly. There will be new income types (see above) and new STP codes used by the ATO to read your data. The income types (both old and new) will need to be mapped to these new STP codes. Further to this, each employee setup will require some review/checking and new fields populated, including tax treatment codes and/or country codes (see below link). (Our next blog will provide you with a spreadsheet you can use to gather the information you will need for each of your employees before you set up STP Phase 2 in your software.)

Our main message to you is “do not panic”! Your software provider will assist you with the move to STP 2 when the time comes. In the meantime, we suggest that you do some research to assist you in better understanding how your payroll will be affected by STP Phase 2. To help you with this, we have created the below table. There are links to relevant ATO web pages which will provide specific information about how STP 2 relates to your employees, their payments, and tax withheld from those payments.

About your PayeesAbout Payments to PayeesAbout PAYG WH
Commencement DateIncome Stream TypeTax Scale Category
Cessation DatePayment CategoryTax Treatment Code
Cessation ReasonPayment ClassificationAnnual Tax Offset Amount
TFN or ABN (or both)DeductionsMedicare Levy
Employment BasisChild Support
Payroll IDAllowances
Country CodesTermination Payments
Income StreamSuperannuation

In our next blog in this series, we will tell you how you can get ready for STP 2 Phase 2, even if your software provider hasn’t begun to roll it out.

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Is your software provider ready for STP Phase 2 now?

BAS Agent's Blog, Payroll & Superannuation, Single Touch Payroll / By / / , , , , / 2 minutes of reading

STP Phase 2 has started! It began on 1st January 2022 and if you are ready and your software is ready, you can begin to report your payroll via this next stage of STP now!

If you aren’t ready, don’t worry, the ATO has provided a blanket deferral to the 1st March 2022. This means that if your software is ready now, you have until 01/03/22 to ensure you are organised and have updated your payroll data to enable a smooth transition to STP Phase 2 reporting.

But how do you know if your software is ready? Most providers would have contacted you by now to explain their plans, but in case you missed their emails, here is a summary of the main providers and whether or not they are ready now:

Note – if your software provider has a deferral as per the above list, then you, as an employer, are covered by that deferral.

In our next blog in this series, we take a look at the technical side of STP Phase 2 and what it means for your payroll.

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STP Phase 2: what is it good for?

BAS Agent's Blog, Payroll & Superannuation, Single Touch Payroll / By / / , , , / 3 minutes of reading

Have you heard? STP (Single Touch Payroll) is expanding from Phase 1 to, you guessed it, Phase 2. For those who don’t know, STP is a technology that automates the transfer of payroll data from payroll software to government departments, mainly the ATO. STP Phase 2 will see payroll data also being shared with Services Australia, the first in a long list of government departments who will eventually get to see your payroll information (in my opinion). The expansion plan also means that employers will need to update their payroll systems in order to provide much more detail about their payroll at each payroll event (more about that in coming blogs).

This compliance change is happening for better or for worse, so my question is “STP Phase 2, what is it good for?” Absolutely nothing! No, only joking! It turns out that there are quite a few benefits for both employers and employees. This blog will outline those benefits.

Benefits for Employers

  • Tax File Number Declarations - although you will need to keep copies of your employees' TFN Declarations as part of your employee records, you will no longer need to send them to the ATO. This is because the information will be sent via each pay event through STP.
  • By nominating an "income type" for employees, you can tell the ATO if you're using concessional reporting for closely held payees or inbound assignees.
  • If you need to make a Lump Sum E payment (back payments more than 12 months old), you won't need to provide a Lump Sum E letter to your employee as it will be included in the STP report.
  • If you change software type or an employee's payroll ID number, this will be reported via the STP report. This will help avoid duplicate income statements appearing in employees' myGov accounts.
  • Data will be shared about some employees with Services Australia (SA). This means that information SA requires from you will be easier to provide e.g. payslips for prior periods.
  • Because the date and reason for employment cessation will be in the STP report, you will no longer need to complete and provide separation certificates to employees.
  • Child support deductions and/or garnishees will be reported via STP reducing the need for you to send separate remittance advice to the Child Support Registrar.

Benefits for Employees

  • Income statements will become more accurate because the ATO will have better visibility of the types of income an employee receives.
  • If an employee makes an error such as failing to report that he has a study loan debt (resulting in an unwanted tax bill), the ATO will be better placed to rectify the issue sooner rather than later.
  • If employees have dealings with Services Australia (SA), they will see a more streamlined approach to data capture evolve over time, including:
  1. Prefilled details on claim forms and fewer requests for documentation;
  2. Spending less time on the phone to SA to confirm details;
  3. Receiving SMS or email advice when STP data shows their family income estimate may be too low, they have a new job or their employment details have changed in some way;
  4. Ensuring that they are paid the correct amount from SA, and
  5. Helping SA understand their financial situation if employees need to repay a debt to SA.

STP Phase 2 requires employers and bookkeepers to make major changes to payroll set up which in the interim, may seem onerous and pretty annoying. However, as can be seen above, there are many benefits for both employers and employees that will come from STP Phase 2 in the long run.

Of course, time will tell if these changes will run smoothly or have unwanted side effects. We will all have to wait and see how things play out. In the meantime, for those wanting further information about STP Phase 2, please visit the ATO STP Phase 2 resources page.

In our next blog in this series, we will review when the main software providers will be ready for STP Phase 2.

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Stapled Super Funds

Payroll & Superannuation / By / / , , , / 3 minutes of reading

In an attempt to protect and improve workers’ retirement savings, the Government announced super reforms “Your Future, Your Super”. This was passed into law on the 24th of June 2021.

As part of these new laws, how you, as an employer, deal with new employees’ super funds and subsequent payment into those funds, has changed.

From 1st November 2021, when a new employee starts working for you, you must pay their super into their “Stapled Super Fund” if he/she does not provide you with a choice of fund.

What is a Stapled Super Fund (SSF)?

An SSF is an existing super account that is linked or “stapled” to an employee so that it follows him/her around when he/she changes jobs.

Why do we need Stapled Super Funds?

In the past, it was common for employees to end up with multiple super accounts, especially when employers paid super into their default super funds. Having multiple accounts means that employees are unwittingly paying fees from each account which can add up to a lot of lost retirement savings. From the ATO, “the change aims to reduce account fees by stopping new super accounts being opened each time an employee starts a new job”.

How do you know when you need to use a SSF and how do you do it?

Currently, when a new employee starts working for you, you must provide him/her with a Super Standard Choice Form to complete. The form will provide you with the employee’s super details. If the employee fails to provide these details to you, you must then find out what his/her SSF is and pay super into that fund.

A request for an SSF for your employee is done via Online services for Business (or your Tax/BAS Agent can do it for you). If you cannot access Online Services, you can ring the ATO on 13 10 20 to make the request. When you log into your online account, go to the Business tab, then Employee Super Accounts, then click on “request”. Follow the prompts and you will be provided with the SSF within minutes.

Please note, that you will not be able to make an SSF request until the ATO has confirmed that you are the employee’s employer. This is done via either them receiving the Tax File Number Declaration details or by an STP lodgement event.

How is a SSF determined by the ATO?

The ATO will find the fund that has had the most recent contribution paid into it. This will become the employee’s SSF.

What if a SSF is not provided by the ATO?

If this happens and your employee has still not provided his/her super details, you may make payments into your default super fund.

What happens if the SSF rejects the payment?

If this happens, the ATO recommends that you make another request. If the same SSF is provided, then you must call the ATO on 13 10 20 for assistance.

Is there a transition period?

Yes! The ATO is providing a transition period. This will be between 01/11/2021 and 31/10/2022. After this period has ended, the ATO may apply penalties should you fail to comply with the Stapled Super Fund rules.

Summary – see our infographic below (free to download)

  1. Stapled Super Funds begin on 1st November, 2021.
  2. Only request SSF for employees who do not provide their super details to you.
  3. SSF requests are done via Online Services for Business or your Tax/BAS Agent can make the requests on your behalf.
  4. If an SSF does not exist, you may make super payments for the employee into your default super fund.
Stapled-Super-FundsDownload

Need more help? Here are 2 reference guides from the ATO

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Employing staff and Coronavirus: Fairwork directions

BAS Agent's Blog, COVID-19, Payroll & Superannuation / By / / , , , , , / 3 minutes of reading

Coronavirus (COVID-19) has brought with it great uncertainty and worry amongst the general population, not the least of these, employers and staff. There are many unknowns relating to how to manoeuvre in these difficult times as an employer, especially in terms of ensuring staff are treated correctly and fairly. Recently, Fairwork released some direction for employers on their website. We advise you read the bulk of the details on their page yourself but we do provide a “taste” of the information provided below.

My employee (or his family member) has Coronavirus. What now?

You must direct the employee not to come to work and to only return when s/he has been given medical clearance. If the employee is part or full time, s/he will be able to take paid personal/carers leave. Casual workers will need to take unpaid leave given they do not receive leave entitlements. Workers refusing to use their leave entitlements are not required to be paid. You can ask the employee for evidence of the illness or emergency i.e. doctor’s certificate if required.

My employee wants to stay home to avoid contact with others.

In this case, you need to discuss this with the staff member and come to an agreement that suits you both. If working from home is an option and your staff member agrees to do so, then make arrangements together to ensure this can occur easily and smoothly. If the employee cannot work from home, then you must decide if paid or unpaid leave will be provided. Where an employee refuses to take paid leave (where it is available), then that employee cannot be paid.

I want to tell my employee/s to stay home.

From Fairwork: ” Under workplace health and safety laws, employers must ensure the health and safety of their workers and others at the workplace as far as is reasonably practicable. ” If you believe that it would be best to instruct your staff to stay home due to possible risks from COVID-19, then you certainly can do so. You can organise a “work-from-home” scenario where possible or if not possible, you can direct staff to remain off site but you must be aware as per Fairwork ” where an employer directs a full-time or part-time employee not to work due to workplace health and safety risks but the employee is ready, willing and able to work, the employee is generally entitled to be paid while the direction applies”, and also “standing down employees without pay is not generally available due to a deterioration of business conditions or because an employee has the coronavirus.”

I want to direct staff not to travel.

While you can direct your employees not to travel for work-related events, meetings etc because you want to reduce the risks associated with COVID-19 at your workplace, you cannot ask them to cancel personal travel/trips.

So, in summary, you need to ensure your workplace is safe and you can do this by keeping unwell employees at home and/or all staff at home if required. If your business is structured in such a way that working from home is possible, then certainly bring that to the table and discuss with staff how best to handle that scenario. Part and full time staff should take personal leave if affected by the virus or unpaid leave if they prefer. Similarly, if staff unaffected by COVID-19 request to remain at home and also cannot work from home, they must opt to take annual or unpaid leave. If you direct staff to stay home and there isn’t any evidence that they have been affected by COVID-19, that is, they are well and able to work, then you must continue to pay them as normal. To read the full list of instructions provided by Fairwork, download their factsheet below.

Coronavirus and Australian workplace_Fair_Work_OmbudsmanDownload

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How to set up STP in your accounting software – part 3 – Saasu

BAS Agent's Blog, Payroll & Superannuation, Saasu, Single Touch Payroll / By / / , , , , / 4 minutes of reading

If you’re a small employer with 19 employees or less, you had until 30 September 2019 to connect your accounting software to the ATO for Single Touch Payroll (STP) purposes. If you haven’t yet done so because you simply don’t know how to do it, then this blog is for you! This is a four-part series and we began the series by looking at STP and Xero software and MYOB. Today we will review STP and Saasu. In the final part of this series, we will also cover QuickBooks Online.

Connecting your Saasu file for STP – or perhaps not!!

Saasu’s set up process for STP is probably the easiest of all the accounting software because there isn’t one – that’s right, you read right – there isn’t one! As per Saasu.com – “There are no special settings that you need to enable STP in Saasu. It will be available on all files and the authentication with the ATO is done behind the scenes.”

In order to get ready for STP, all Saasu ask of you is that you review your current payroll and company set up and ensure the following is in place:

  • Confirm employee information is accurate – including name, address (including postcode), main phone number (including area code and no spaces), date of birth, and gender, on the Employee Details page (View > Employees > click ‘View or Edit Employee Details’ icon)
  • Confirm that your ABN or Withholding Provider Number (WPN), address (including postcode and state is in short form (i.e VIC, QLD etc) , and phone number (including area code and no spaces) is entered on the File Identity page (cog icon > Settings for this file > File Identity)
  • Check your payroll processes and ensure your pay items are correct and you are paying staff properly. Especially check pay items like allowances and deductions.
  • You must be using the payroll function in Saasu rather than entering payroll information via journal otherwise STP reporting will not work.

Once you have reviewed the above and are satisfied that your set up is adequate, then you are ready to report your first payrun to the ATO via STP – easy huh!

Reporting your payrun to the ATO

This following is taken from the Saasu website.

  1. Process your regular pay run
  2. Click on Reports > Single Touch Payroll
  3. Click on the cog icon, select Regular Pay Event, specify the report settings and click Run
  4. The data that matches your settings will be displayed and can be checked for accuracy
  5. Ensure that pays to be submitted are ticked (pay runs will be pre-ticked and can’t be modified), then click the Upload icon
  6. Before the report is submitted to the ATO you will need to authorise the submission by agreeing to “Sign declaration with my email address” (this is the email address you are signed into Saasu with) and click Submit
  7. The ATO has a standard response time of up to 72 hours before the upload is accepted and successful. At times, this may be quicker and could be as little as 10 minutes. You can move away from this screen and continue to work on other things in Saasu while the STP report is being processed.

Remember to come back to the Single Touch Payroll Report screen (Reports > Single Touch Payroll) about 10-15mins after you have submitted a regular Pay Event. This is to ensure the submission has been accepted by the ATO, and there are no errors that need further attention. If you haven’t moved away from this screen then you may need to refresh your browser to see the updated information.

Note: Once a Pay Event has been submitted to the ATO, you cannot submit any further Pay Events until the previous submission has been accepted or, if rejected, the submission result actioned.

So there you have it – there isn’t really any major set up of STP for Saasu which makes it very easy for users to comply with STP requirements. I must say I am a fan of this scenario given that other software do involve many more steps to enable STP connection which can be frustrating for users. Keep it simple stupid I say! In our final blog in this series, we will look at how to connect STP in Quickbooks Online.

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Accessorial Liability: when to stay and when to run…

BAS Agent's Blog, In My Honest Opinion (IMHO), Payroll & Superannuation / By / / , , , , , / 5 minutes of reading


An accessory to a crime is a person who participates knowingly and voluntarily in the commission of a crime. An accessory can be categorised as before or after the fact (the commission of the crime).   They need not be actually present at the scene of the crime in order to be held liable. 

Legalmatch.com

In the bookkeeping world, there is much chatter about “accessorial liability” especially in relation to those providing payroll services for clients. So what is this about and what does it mean? Basically, as per the above quote, if you are involved in contravening the Fair Work Act 2009 and are knowingly doing so, then, if investigated by the Fair Work Ombudsman (FWO), you could be classified as an accessory to the contravention and be prosecuted accordingly. In simple speak, if you are involved in performing payroll tasks for a client (or your employer) and you know that something is being done illegally or incorrectly in relation to the payroll and you do not do anything to rectify it, you have just made yourself an accessory. The FWO is clear about this and there are no if, buts, or maybes. No excuses accepted. So there are 3 aspects to accessorial liability – being involved, knowing it’s happening, and doing nothing to stop it. Is this scary for bookkeepers? You bet your life it is!

Should I stay or should I go now?

So if you’re a bookkeeper reading this and you’re not already scared about your involvement in your clients’ payroll, then you should be! In general, you do your best and bring your expertise and knowledge to the task, and hope that all will be well. But is that enough? Perhaps not it seems. The FWO will have us believe we need to do more in order to avoid becoming an accessory to payroll contraventions. So what can you do if you suspect something is out of kilter with a client’s payroll? Athena Koelmeyer from Workplace Law makes the following suggestions:

  • Arrange for a payroll audit to be performed by a professional HR service. This will uncover any anomalies and errors being made and assistance will be provided to rectify them.
  • Make sure that appropriate processes are in place and are being followed correctly. These processes should include:
    • ensuring employers (your clients) are across their obligations under the Fair Work Act 2009, modern awards and any record-keeping obligations
    • ensuring employees are properly classified under their relevant award
    • ensuring employees pays are correctly in terms of minimum rates of pay, allowances, penalties and loadings
    • ensuring all payroll records are compliant and correct
    • keeping up to date with changes to modern awards, especially pay rates, allowances, loadings, penalty rates etc.
    • conducting regular audits of your payroll set up, especially when using generic software
  • If you discover any anomalies with your client’s payroll, communicate this immediately with the client and ensure that they rectify the situation. Keep written records of the steps that were taken to repair the issue/s. If neither you or your client can rectify the issues, seek professional advice and assistance. Do not ignore the situation.

The above is great advice is should be followed if you are going to provide a best-practice service to your client. As bookkeepers, however, we all know that in reality, making clients cross the t’s and dot the i’s is not as easy as it sounds. Some clients take your advice on board and some don’t for whatever reason. So what is Athena’s advice if you find yourself working with a client who is openly flaunting Fair Work laws and who refuses to make any improvements? Basically, her advice is to

RUN FORREST, RUN!

Athena says you always have to come back to the accessorial liability provisions under section 550 of the Fair Work Act when making your decision about whether to persist or leave. She says that where you are involved (processing payroll) AND you know that payroll processes as above are not sufficient, AND you don’t do anything about it (even if you tried to), you will be seen as an accessory in the event of prosecution. While this is not the forum to go into possible charges and legal consequences of said prosecution, I’m sure you’ll agree that you do not want to go there! Athena recommends that you should terminate your engagement with these types of clients immediately, no questions asked, and just walk away. Before walking away, always put your concerns and any steps taken to rectify the situation in writing to the client and retain this as your record in the event that you are pursued by the FWO. She also advises that you should report non-compliant clients to the FWO as an extra means of protecting yourself. Athena says, and I quote:

If a payroll provider makes a client aware that their systems are not compliant, refuses to participate in the contravening conduct and terminates the relationship with them, then the payroll provider has done all that they can do to make the client aware of their non-compliance and not participate in any contraventions.

Payroll HQ

In my opinion, there isn’t any job worth doing where you are putting yourself at risk of litigation and possible jail time. If you are reading this and you think you may be at risk, then get some advice from a trusted advisor and/or your bookkeeping association. If you are sure you are at risk, then take Athena’s advice and run, run, run, and don’t look back!

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How to get started with Single Touch Payroll

MYOB, Payroll & Superannuation, QuickBooks Online, Saasu, Single Touch Payroll, Xero / By / / , , , / 5 minutes of reading

As mentioned in our last blog, smaller employers with less than 19 employees will need to start reporting their payroll data via Single Touch Payroll by 1 July 2019. That’s not far away and if this affects you, you need to start getting ready now! Don’t panic though, we are here to help and to that end, we have prepared a “get started with STP” checklist to assist you.

Before sharing our checklist with you, just a little bit of background for those in the “I don’t know anything about STP” camp…

What is STP?

STP is a reporting change regarding your payroll. Instead of reporting your payroll data once to the ATO at the end of the financial year, you will report each pay run or “payroll event” (as it is now called) to the ATO at the time it is processed. The reporting will be done via your accounting software. Your payroll processes do not need to change – the only change is that your payroll information will be reported more often to the ATO.

Why STP?

The ATO are trying to streamline the processes for employers and employees regarding all things payroll, from providing employers with current tax file number information and super details of new employees, to allowing employees to see their tax and super information in real time. Some benefits of STP can include:

  • No more payment summaries (or “income statements” as they now called). Employers will no longer need to provide employees with payment summaries as they will now access them via their myGov accounts instead, once the final pay event of the financial year is sent to the ATO via STP.
  • No more PSAR’s – employers will no longer need to provide the ATO with a payment summary annual report.
  • Employees can see at any time, their year-to-date payments from employers, superannuation paid, access their payment summaries and also access their Notice of Assessment once their tax return is completed. They will be able to access all of this information via their myGov accounts.
  • Employers will be able to offer online commencement forms to new employees including the TFN declaration, Superannuation Choice form and Medicare levy variation declaration form. This will all be available via myGov and will be provided to both the employer and the employee making onboarding a new employee a more streamlined process and helping to delays and errors.

Getting started with STP Checklist

The first thing to know about STP is that nothing really changes for you. You will continue to process your payroll as you always have except that at the end of each pay run, you will click a button in your accounting software and send the payroll data to the ATO. Of course, before you can do this, you need to set up STP in your software and ensure that the ATO knows about it! Below is a list of items you need to do in order to get ready for STP.

  1. Decide when you want to start reporting via STP. You can begin right now if you wish, meaning your 2018-19 FY year-to-date payroll data will be sent to the ATO. You can wait until the official start date i.e. July 1 2019 or you can opt in some time between July 2019 and September 30 2019 as the ATO are allowing smaller employers to delay STP until the end of the first quarter in the 2019-20 FY (but no later).
  2. Employees and myGov accounts. In the near future, all communications from government departments including the ATO, will only be available via a myGov account. You need to tell your employees to register for a myGov account now. Here is a link you can share with employees from the ATO about STP and how it relates to them. You can also provide them with this link to assist them to register for a myGov account https://www.humanservices.gov.au/individuals/online-help/create-mygov-account
  3. Perform a payroll health check. The ATO advise that it is good practice to review all payroll items and employee setups etc. before starting to report via STP to ensure that payroll data reported is accurate and correct. We think this is a good idea too. Check things like allowances, superannuation rate, salary sacrifice, deductions, PAYG withholding rate, employees’ contact details, using correct award, agreement and/or contract etc.
  4. Connecting your software to the ATO for STP. In order to lodge payroll data via STP, firstly, you need to notify the ATO of the special software ID (SID) number from your accounting software. There are several ways to do this. If you have access to your business portal, you will notify via Access Manager. If you have your ABN connected to your myGov account, you can notify via myGov. If you don’t have either of those options available, you can call the ATO on 1300 85 22 32 and notify over the phone. Note, this is an important step and if not done, you will not be able to send your STP report to the ATO. See more information here. Once you have notified the ATO re the SID, you are ready to set up STP in your software and start reporting. Below are some links re to how to set up STP in each of the more common accounting software packages to get you started:

Need more help?

Further information or reading. If you would like further information or would like to do some reading about STP, here are some links which may assist you:

We can help – give us a call..

We realise that this is a lot to take in and that you will probably have questions or need assistance with set up. Please feel free to contact us to make an appointment to discuss your needs etc. We’d be happy to assist.


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