Introduction to Single Touch Payroll
Single touch Payroll or STP, was introduced in July 2018 and is the new way that employers now report to the ATO.
It means that payroll and superannuation data is reported electronically every time staff are paid, instead of annual reporting.
With the introduction of STP reporting there is no longer a requirement for employers to produce Payment Summaries for employees at the end of the financial year.
Ready Pay no longer supports the Payment Summary processing.
Legislation
- Who is obliged to report?
STP forms part of the Budget Savings (Omnibus) Bill 2016 and requires Employers to report their employee earnings for each pay event (payrun) as that event occurs. - When am I obliged to start reporting?
As of 1st July 2019 all employers are required to report using STP, regardless of the number ofemployees.
Events
Events are the transactions that you will be sending to the ATO.
There are two kinds: Pay Events (PE) and Update Events (UE).
Pay Event (PE)
This is the most common type of STP transaction and will typically be run at the completion of each payrun, after the pays have been processed through to the bank.
The PE will send the updated YTD earnings, tax and SGC information to the ATO for processing.
This information will then update the employee’s myGov account as well as pre-fill the relevant W1 and W2 labels on your company BAS.
This process is performed via the STP Processing screen in Ready pay.
The process for sending your PE data to the ATO is covered in a following section.
IMPORTANT: as an employer you are still responsible for ensuring that the W1 and W2 amounts on the BAS are correct as there are scenarios where the amounts pre-filled from STP will be incomplete. These include;
- commencing STP processing part-way through your BAS reporting period.
- transitioning from one STP compliant payroll system to another part-way through a BAS reporting period.
- any payroll values that are adjusted via an STP “Update Event” (see below), as these do not update the W1 and W2 pre-fill amounts.
Update Event (UE)
An update event is used when the employer needs to update the information that has previously been sent to STP for one or more employees.
This could be for various reasons;
- A correction to a previous pay for one or more employees, this may also be done via a subsequent PE.
- An off-cycle payrun for one or more employees, this may also be done via a subsequent PE that includes all the corrected employees.
- Updating employee YTD balances when commencing STP part way through a year.
- Setting YTD figures back to zero if changing payroll service providers part-way through a year and migrating the YTD balances to the new system.
- Once you have finished processing all payrun transactions for a financial year, the UE is used to set a “Finalise” flag for each employee.
This is the equivalent of the old ATO Payment Summary EOFY process.
What Information is sent to the ATO via STP?
As well as the YTD earnings, tax and SGC information, each PE and UE will include the following employee information.
As indicated, some of this information is mandatory, while other information is optional for STP, though if present in your Ready Pay data it will always be sent.
| Ready Pay Field | Mandatory / Optional | Notes |
| Employee Details | ||
| TaxFileNo | Optional | Must be valid if supplied |
| Contractor ABN | Optional | Must be valid if supplied |
| Employee No. | Mandatory | |
| Surname | Mandatory | |
| First Name | Optional | |
| Birth Date | Optional | Must be valid date if supplied |
| Address line 1 | Mandatory | Ready Pay sends 'Preferred' address |
| Address line 2 | Optional | |
| Suburb | Mandatory | |
| State | Optional | Not required for non AU addresses |
| Postcode | Optional | Not required for non AU addresses |
| Country | Optional | Not required for non AU addresses |
| Optional | Ready Pay sends Employee Self-Service Kiosk email | |
| Phone Number | Optional | Ready Pay sends 'Preferred' phone number |
| Hired Date | Optional | |
| Termination Date | Optional | |
| TFN Declaration Details | ||
| Terminated | Optional | |
| Resident | Optional | |
| Basis of Payment | Optional | |
| Claim Tax Free Threshold | Optional | |
| HECS / HELP | Optional | |
| SFSS | Optional | |
| Payee Declaration Acceptance | Mandatory | Ready Pay sends 'False' |
| Declared Date | Optional | |
See the following pages for further STP information:
Setup: Commencement and Preparation
Submitting Events: Single Touch Payroll Processes
Exporting local copies of STP Events