Single Touch Payroll (STP) has become compulsory in some countries, (namely Australia), for reporting payroll information for tax purposes.
What that means is this; every payday a report of who earned what must be sent to the relevant tax authorities. It also includes other information, such as details of the employers Gross Salary & Wages and Tax Withheld.
At year end ‘Final’ data must also be sent, and this replaces any other process used, (payment summaries etc).
Single Touch Payroll does not change how or when you pay, only how you report it. This means it does not affect your business, only your accounting and bookkeeping. The reason for making STP mandatory is to let the tax authorities check that each person is meeting their full tax obligations.
At Probookkeeper we use Xero accounting software, and they are on top of this new development, stating, “When you set up STP in Xero, you can report employee earnings, tax and super information…” They have organised STP so you can set up a test run that does not go to the taxman, just in case you make mistakes before you get used to it.
It is simple to use; just chose the price plan best suited to your needs; connect your Xero account to the relevant tax office and you are ready to go. There are a few other steps to setting STP up ready to use, and these include; proof of ownership, and a Software ID (SSID), (these will both be listed in your Xero account).
Another option is that we at Probookkeeper can do this for you to save you time and the effort of learning new ways to report payroll.
Even if this is not obligatory in your country, you may find it beneficial to switch to this new way of reporting, so why not get in touch with us to discuss STP.