Once reporting through STP-enabled payroll software you will send tax and super information to the ATO each time you run your payroll and pay your employees.
Here is the STP process:
• Run your regular payroll to pay employees (eg weekly, fortnightly or monthly)
• Your employee receives their salary or wages, and their payslip as they did previously
• Your payroll software includes mandatory fields to capture the STP data, which includes year-to-date salary or wages and super information
• The STP data is sent to the ATO. The STP file is called a “pay event”. The way the file is sent will depend on the software. This may be directly, or through a sending service provider (a third party)
• the ATO receives the STP data and matches the information to the employer and their employees
• The ATO makes STP information available to employees through myGov, to employers through the Business Portal and to tax agents through the Tax Agent Portal. Employees can see their year-to-date tax and super information.
You will no longer need to provide your employees with payment summaries for the information they report through STP. Employees will find the information they need to complete their income tax return in ATO online services, accessed through myGov. Employees who choose not to have a myGov account can contact the ATO to get a copy of their payment summary information.
STP data will also be available to tax agents in pre-filling. From January 2020, the ATO will pre-fill activity statement labels W1 and W2. And note that employers will no longer need to provide the ATO with a payment summary annual report (PSAR).
You will be able to offer online commencement forms to new employees, including Tax file number declaration, Superannuation (super) standard choice, Withholding declaration and Medicare levy variation declaration forms that can be sent to the ATO via myGov.
If you have 20 or more employees on 1 April 2018 you have been required to report to the ATO through STP-enabled software from 1 July 2018, unless you’ve been granted a deferral.
If you have 19 or fewer employees on 1 April 2018 you can choose to report through STP now if your software is ready.
Before using STP
You will most likely need to take a few initial steps to be able to send data to the ATO. These have been outlined by the ATO on this web page.
Note that you do not need an AUSkey if you are using a sending service provider (SSP) such as a registered BAS Agent to send the STP file.
You also do not need an AUSkey if you are using cloud-based or online software to send the STP file, eg Xero, MYOB or Quickbooks. You will connect to the ATO using the unique software ID the software provider has given you. You should check with your software provider if they do not have a software ID.
The software ID is similar to a serial number. You can notify the ATO of the software ID by phoning 1300 85 22 32 or completing a one-off notification through Access Manager (you need an AUSkey to use Access Manager). The ATO will not be able to receive the STP report without the correct software ID.
You will need their own AUSkey if they are using software that connects directly to the ATO, such as an on-premise solution.
The ATO understands the transition to STP is a major change for some you. You, registered agents and software providers have been able to request more time to start STP reporting.
Some software providers applied to the ATO for a later start date (a deferral) for their employer clients. If a software provider has a deferral, they will advise their clients and provide them with a deferral reference number (DRN).
You do not need to do anything with the DRN. This number verifies the provider was granted a deferral by the ATO. Registered agents who also provide a payroll service can apply for a deferral for their clients by using the ATO’s online form.
