Single Touch PayrollIS YOUR BUSINESS ATO READY?

What is Single Touch Payroll?

When does it start?

STP Micro Employers

Is your payroll process ready for STP?

Reckon and Single Touch Payroll

FAQs

Glossary

3

4

6

9

12

14

19

Contents

3

What is Single Touch Payroll?Single Touch Payroll (STP) is an initiative by the ATO that changes the way employers report on employee payments including salary and wages, PAYG withholding and superannuation.

Under STP, employers send payroll information to the ATO at the same time as they pay their employees typically weekly, fortnightly or monthly via their payroll software.

Reporting each pay run saves time and resources for businesses at the EOFY because you have already submitted payroll information to the ATO throughout the year.

4

When does it start?Your Single Touch Payroll start date is determined by the number of employees you had on 1 April 2018. Single Touch Payroll is now mandatory for all business with employees.

For employers with 20 or more employees: Single Touch Payroll reporting became mandatory from 1 July 2018.

For employers with 19 or less employees: Single Touch Payroll reporting became mandatory from 1 July 2019.

For employers with 1- 4 employees: Single Touch Payroll reporting is mandatory from 1 July 2019, however the ATO has announced STP concessions for ‘micro businesses’ and developed a register of solutions specifically for this market. See ATO Register

749,000 The estimated number of small employers in Australia who are required to transition to Single Touch Payroll reporting from 1 July 2019.

5

ATO providesinformation todevelopers

Conduct an employee headcount to determine your STP start date.

STP is mandatory if you have 20 or more employees.

STP is mandatory if you have 19 or less employees.

Single Touch Payroll Timeline

Please note: There are limited exemptions and deferrals available for small businesses. Check the ATO website for more information.

October 2017 1 April 2018 1 July 2018 1 July 2019

6

STP Micro EmployersIn October 2018, the ATO requested software providers to develop a Single Touch Payroll solution for micro employers with 1-4 employees, recognising that many of these businesses don’t currently use a payroll software solution.

At Reckon, we have developed a FREE and easy-to-use product for this market called the Reckon Single Touch Payroll App - enabling micro employers to easily transition to Single Touch Payroll and continuing our long term support of small business in Australia.

7

What are the benefits of STP?Employers

Under STP, employers send payroll information to the ATO at the same time as their standard pay runs. This saves time and resources for businesses at the EOFY because they’ve already submitted payroll information to the ATO throughout the year.

The ATO will pre-fill payroll fields W1 & W2 in your BAS because they already have the information from you, reducing potential errors and double handling.

You are no longer required to generate and distribute payment summaries to employees as this information will be available online via myGov.

On-board new employees quickly with online commencement forms including Tax File Number Declaration and SuperChoice.

8

Employees

Get up to date access to payments and contributions via MyGov including superannuation, income and tax.

Your payroll information will pre-fill in your tax return, making it easier and quicker to complete as you won’t need to wait for a payment summary from your employer.

Electronic commencement forms including a pre-filled Tax File Number Declaration and SuperChoice form makes starting a new job easier.

Your payroll cycle and requirements to pay your employees won’t change. STP is simply a change to how and when you report payroll information to the ATO.

9

Is your payroll process STP compliant?Under STP you’re required to send some additional reporting information to the ATO every time you pay your employees. To enable this direct submission, many employers will need to upgrade or replace their payroll system to meet their payroll reporting obligations to the ATO.

10

I currently use accounting software to process my payroll.

If you currently manage your payroll processes through accounting software, you can start STP as soon as your software is STP-enabled. Contact your payroll software provider to find out more information about your product, and when it will be ready. You can check the Australian Business Software Industry Association (ABSIA) catalogue for payroll solutions that are Single Touch Payroll-enabled.

I currently use a third party to process my payroll.

A third party such as a payroll provider or registered tax agent can report to the ATO on your behalf. You will need to make sure they are using a solution that is updated for Single Touch Payroll reporting.

We recommend you review the employee data in your software and ensure names, addresses and date of birth records are accurate and up to date.

Most companies fall under three methods.

11

I currently use paper and manually submit my payroll obligations to the ATO.

If you report manually, you are not Single Touch Payroll compliant.

The introduction of STP means you need to report payments such as salaries, wages, PAYG withholding and super information digitally through a payroll solution that is Single Touch Payroll- enabled. To meet this new obligation, you can:

Use a registered agent or payroll service provider to report to us through Single Touch Payroll on your behalf.

Purchase payroll software that is Single Touch Payroll-enabled. The Australian Business Software Industry Association (ABSIA) has a product catalogue that lists STP-enabled software.

Reckon has a range of STP-ready and ATO compliant solutions for all sized businesses. See our website for more information.

12

Reckon and Single Touch PayrollReckon successfully completed the Australian Taxation Office (ATO) STP Certification process, which verifies the following products are STP-enabled and ATO compliant:

Reckon Single Touch Payroll App

Reckon One

Reckon One Payroll

Reckon Accounts Hosted

Reckon Accounts Desktop

Payroll Premier

To enable STP compliance across the majority of our range, we’ve developed a new application called GovConnect STP. The application acts a gateway to the ATO enabling you to view and lodge your STP reporting no matter what Reckon product you use.

13

We’ve got a range of STP compliant solution to suit every sized business.

Get Single Touch Payrollready with Reckon

Choose a solution that suits your business

Send STP reports to the ATO each pay run

SINGLE TOUCH PAYROLL APP

$0PER MONTH

Just need payroll?This one is for you

RECKON ONE PAYROLL

$7PER MONTH

Manage payroll and accounting all in one

RECKONONE

$14PER MONTH

From a free mobile app to submit payroll info to the ATO, to paying unlimited employees for just $7 a month – we make STP

compliance a breeze.

Get ready now at reckon.com/STP

14

FAQs

General STP SubmissionCan I submit STP before July 1 2019?

Yes, absolutely! It’s best practice to start now. However, once you start submitting STP, you will need to continually submit STP at every pay run and there’s no need to provide an End of Year Payment Summary to the employees.

If I go away on holiday, how do we submit STP while away?

You will need to share your GovConnect STP with another staff member so they can lodge it on your behalf. If you do not have other staff members, you can submit pay events to the ATO in advance.

Can the STP file be uploaded on the ATO Business Portal?

No, this is separate portal. The ATO do not provide a portal to submit STP.

What is the timeframe to submit STP reporting once after the pay run?

You will need to submit STP on or before the day you do a pay run (the date the employee expects to receive their pay).

If I’m a bookkeeper with multiple clients, how do we submit STP?

Your clients will need to sign up to Reckon GovConnect, add you as an advisor and share the STP entity with you. As a bookkeeper, you will be to manage all your clients under one Reckon Portal login.

15

Do BAS agents/Bookkeepers have to apply for lodging salary information on behalf of their clients document?

If a BAS agent or Bookkeeper need to report STP at regular intervals, they will need to:

1) Obtain a letter of engagement (STP engagement authority) from the client requesting STP services etc. This letter does not need to be provided to the ATO (More info on the ATO website: click here)

2) Ensure they are linked to the client in the tax agent portal

3) Register the software ID against the GovConnect STP, in ATO Access Manager

4) Put their agent details in Govconnect STP

Can micro businesses submit payroll quarterly?

Yes, only until 30 June 2021. The micro business will need to do this through their registered tax agent or BAS agent to do this. The agent must also register for that business with the ATO to report STP information quarterly.

(More info on the ATO website: click here)

Do I need to provide my employees their payment summary?

If you report your payroll information to the ATO through STP, you may not need to provide your employees with a payment summary. The ATO will make this information available to them via their myGov account. If you do not report your information through STP, you will need to provide your employees with a payment summary. Reckon software will provide both options for our customers.

16

Reckon GovConnectCan you have more than one person accessing a single GovConnect STP account?

Yes, but you will need to have two separate Reckon Portal logins due to MFA. One person can set up GovConnect STP and then share or revoke access to as many users as required

What if I find a mistake in one employees pay after I’ve submitted STP report for that pay run?

1. At the next pay event, you can enter the correct amount as the YTD figures will be updated to the ATO.

2. Edit the employee’s pay in Reckon software, then create and submit an “Update Event” to the ATO using GovConnect

Do I need an Auskey to use Reckon GovConnect?

Only time you require a business or tax agent Auskey to use Reckon GovConnect is to register the Software ID with the ATO- if you are doing this with the ATO access manager. If you do not wish to use Auskey, you can call the ATO to register your Software ID. The phone number is 1300 852 232. You will need Reckon Limited’s ABN which his 14 003 348 730 and the unique Software ID which was generated in your Govconnect application.

Do I need employee numbers for STP?

Yes, this is a requirement from the ATO. All employees must have an employee number as they need it for data matching purposes. This is an internal number separate to the TFN. You can assign employee numbers in Reckon software (it can be alpha & numeric digits)

17

What happens when an employee is terminated?

When doing the pay run, termination payments will automatically mark as a “Final Pay Event” for the employee. You can include the terminated employee(s) in your normal pay event (there’s no need to run a separate submission).

What’s the difference between Update Event and Full File Replacement?

Update Event can be used to correct Employee YTD figures, where a change has been made to a prior Employee Pay Event.

Full File Replacement can be used to completely replace the latest Pay Event file you lodged to the ATO when the file was sent in error and contained significantly corrupt data.

How do we notify that it’s the End of Year to the ATO via STP?

When completing your final pay run and lodging your STP, ensure that you mark the pay event as “Final Pay Event” which will indicate to the ATO it is a final pay event.

Why do I get an “Invalid Company Information Provided” when I submit in GovConnect?

The Company Information/Legal Name on your Reckon software does not match what is on the ABN Register for e.g. if your GovConnect says “Reckon Pty Ltd”, the Company Information/Legal Name needs to say “Reckon Pty Ltd”. It must be exactly the same format/characters as what is on the ABN register

What if I need to change my MFA device e.g. change MFA from SMS to Google Authenticator App instead?

You will need to revoke your current MFA access on the Reckon Portal. Go to Profile > Under Multifactor Authentication, click “Revoke”.

18

Can I edit the Company Information on GovConnect STP?

Yes, you will need to update the Company Information such as Company Name or Company Address, on the Reckon software and export the file to update the Company Information on GovConnect STP. If you need to add a branch number, you will need to add a new GovConnect STP account with the branch number included.

I’m a current customer, do you have any guides on how to enable my product for STP?

GovConnect STP Guide > How to set-up a portal account for GovConnect STP

STP Reckon One Guide > How to process STP in Reckon One

STP Reckon Accounts & Hosted Guide > How to process STP in Reckon Accounts & Hosted

STP Payroll Premier Guide > How to process STP in Payroll Premier

19

GlossaryABN – Australian Business Number - An Australian Business Number (ABN) is a unique 11 digit number that identifies your business to the government and community.

ABSIA – Australian Business Software Industry Association - ABSIA is a non-profit association created to represent the business software industry and act as the primary contact point for interaction between involved parties e.g. government, software developers.

ATO – Australian Taxation Office - The Australian Taxation Office is the principal revenue collection agency of the Australian government.

BAS – Business Activity Statement - The business activity statement is a form submitted to the Australian Taxation Office by all businesses registered for GST to report their taxation obligations.

EMPDUPE – A file containing your PAYG payment summary report.

myGov – myGov is an online government portal that gives you secure access to a range of services such as Centrelink, Medicare, and the Australian Taxation Office using one username and password. It’s also a central inbox for your messages from these services and a quick and easy way to make changes to your personal details.

PAYG – Pay As You Go - It is an acronym used for two different processes required by the ATO for businesses in Australia: PAYG instalments and PAYG withholding.

PAYG Instalments – A system for making incremental payments which accumulate towards your expected end of year income tax liability.

20

PAYG Withholding - Employers pay their employees income tax obligation on their behalf. Your company is obligated to withhold some of their payment and send it to the ATO at regular intervals.

Payment Summary – At the end of each financial year, employers must give employees a summary of their income and tax withheld for the past year. Also referred to as ‘group certificate’.

SBR – Standard Business Reporting - A standard approach to online or digital record keeping that was introduced by the government in 2010 to simplify business reporting obligations. SBR is built into business and accounting software making it SBR-enabled.

SG – Superannuation Guarantee - A compulsory system of superannuation support for employees, paid for by employers. SG contribution will remain at 9.5% until 30 June 2018.

SuperChoice – A form the employee fills in to advise an employer of their choice of super fund. Employer uses this information to make contributions to their nominated super fund.

TFN Declaration – Tax File Number Declaration - A form the employee fills out and gives to the employer so the employer can work out how much tax to withhold from payments they make to you.

The material in this document is of a general nature for

guidance only. Reckon Limited does not accept responsibility

for its contents. If you have any questions about your specific

circumstances please consult your professional adviser.

21

Questions about Single Touch Payroll?

Contact

1800 RECKON (Toll-free 1800 732 566)

Email: customerservice@reckon.com

Find an advisor

Search for accountants, bookkeepers and other consultants who are certified in using Reckon products.

Reckon Community

Visit our community page to find answers from our expert users, partners and the Reckon Team.

For more information visit the Reckon Single Touch Payroll home page at reckon.com/STP.