Many businesses have been impacted by the myriad of COVID-related updates this past week. To ease some of the stress for business owners and employers, an extension to finalise your employees’ Single Touch Payroll (STP) data until Saturday 31 July has been announced by the ATO.
The ATO still highly recommends to have it finalised by Wednesday 14 July if possible, and to let all employees know when this has happened so they can promptly lodge their income tax returns.
Before making your finalisation declaration, make sure your STP information is correct. If you cannot make a finalisation declaration by the due date, you will need to apply for a deferra here.
What is STP?
STP works by sending tax and super information from your STP-enabled payroll or accounting software to the ATO as you run your payroll.
You will:
- run your payroll
- pay your employees as normal
- give them a payslip.
Your pay cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly.
Your STP-enabled payroll software will send the ATO a report which includes the information the ATO will need from you, such as:
- salaries and wages
- pay as you go (PAYG) withholding
- super liability information.
ATO systems will match the STP information to our employer and employee records.
At the end of the financial year you’ll need to finalise your STP data. This means you are making a declaration that you have completed your reporting for the financial year.
Once you finalise your data, your employees’ Income statement in ATO online services will be marked as ‘Tax ready’. They, or their registered agent, will use the Income statement to lodge their tax return.
Why use STP?
When you have reported and finalised your employees’ information through STP, you are exempt from:
- providing payment summaries to your employees
- lodging a payment summary annual report.
For payments to your employees that were not reported through STP, you still need to:
- give a payment summary to your employees
- provide us with a payment summary annual report for these payment summaries.
For more information about STP, please visit ATO’s website.
Visit ATO website