Single Touch Payroll made easy

Australia’s new regulations for payroll will soon be applying to all businesses this year and relief is at hand.

Go see your local TaxAssist Accountant tax agent now and set up Single Touch Payroll (STP), and we will take the worry away from you doing this weekly and buying in expensive payroll software.

Our rates are reasonable for payroll and this headache tipped to be as big as GST can be removed.

From 1^st July 2019 all payroll will have to be uploaded to the Australian Taxation Office (ATO) weekly, so they can track it and your payments. ATO Commissioner Chris Jordan has urged small businesses not to panic.

The ATO website states the following on STP:

Single Touch Payroll authorisations

The ATO has streamlined the process for clients to authorise their registered agent to act on their behalf for STP lodgment.

The STP pay event is an approved form submitted to the Commissioner of Taxation, and requires the following each time it is lodged:

• a declaration that the information contained in the approved form (the STP pay event or update event) is ‘true and correct’
• the declarer is authorised to lodge the approved form.

The STP engagement authority allows eligible employers to provide this once a year instead of at each pay event.

STP engagement authority

If a registered agent reports through STP for an employer, they can obtain written authorisation to make this declaration through an annual agreement.

This written agreement is called an STP engagement authority and will evidence a registered agent’s authorisation to prepare STP pay events on behalf of an employer. It will allow the registered agent to make the relevant declaration to the Commissioner at the time of lodging each STP pay event.

The STP engagement authority is subject to eligibility criteria and must only be used for lodging an STP pay event – not other approved forms.

An authority must be reviewed and signed by an employer and their registered agent every 12 months or any time there has been a significant change in the industrial relations, taxation or payroll process.

Eligibility for the authority

To be eligible to provide a registered agent with STP engagement authority the employer must not:

• have any overdue activity statement lodgments
• have any outstanding debts, unless they are covered by a payment arrangement or subject to review
• currently be or have been the subject of ATO compliance activity for PAYG withholding in the last two years.

Directors of companies must not have been issued with a Director Penalty Notice (DPN) in relation to the company or any other company where they are or have been a director.

What to include in the authority

The STP engagement authority should outline the responsibilities of both parties. It should include the agreed terms of the employer’s collation of payroll related inputs and their process for calculating and paying their employees, as well as their taxation and superannuation obligations.

This approach may be applied where a registered agent is preparing and lodging STP reports on behalf of the employer.

The agreement will need to be reviewed and signed annually or when there is a significant change. At a minimum, it is expected the declaration will include the following:

• The STP engagement authority may only apply for a period of no longer than 12 months. This is to ensure the employer and the registered agent have reviewed and agreed on the terms of the arrangement in line with industrial, taxation and business changes impacting the payroll.

Both the employer and registered agent should co-sign the agreement, and keep a copy for their records. You do not need to provide a copy to the ATO.

More information can be found on the ATO website here.

Date published 3 Jan 2019

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.