Tax Return:: What is a Single Touch Payroll (STP) and How Does It Actually Work?

The Single Touch Payroll (STP) is an initiative set up by the Australian Government to help reduce the reporting burdens that employers often experience as they need to report to several government agencies.

With the STP, employers are now able to report their employees’ payroll information to the ATO each time they pay their employees using an STP-enabled accounting software. Payroll information that would be reported by the employers include:

> Salaries and wages

> Pay As You Go (PAYG) withholding

> Superannuation

With the introduction of the STP, employers no longer need to provide their employees with their payment summary at the end of each financial year.

STP was initially rolled out from 1 July 2018 for employers who have 20 or more employees within their business. As of 1 July 2019, STP was also deemed a mandatory obligation for those employers with 19 or fewer employees.

If your employer does report to the ATO via STP, as employees, you would be able to see your year-to-date (YTD) wages and tax as well as super information since the beginning of the financial year by accessing your ATO online services (through your myGov account). Although it is not compulsory for you to have a myGov account, you would not be able to gain access to your tax and super information if you do not have one. Please refer to the link below for the steps on how to create your myGov account.

Creating your myGov Account Link: https://www.servicesaustralia.gov.au/mygov-help-create-mygov-account

The information that’s displayed on your ATO online services account will get updated each time your employer issues you your pay. However, please be mindful that it could take a few days for the information to be fully updated on the ATO portal.

Your nominated tax agent will know whether or not your employer reports via STP. In addition, your income statement (i.e., basically your payment summary for the financial year) will also be accessible by your tax agent so that they can use it to prepare for the lodgement of your annual tax return.

This brings today’s discussion to an end but if you ever come across any questions regarding your tax return or super, you can contact us through our Facebook Page (P&C Tax Professionals – Australia) or by sending us an email to pnctax@naver.com.

Thank you and bye for now!