Overview of Single Touch Payroll

This section covers the implementation of Single Touch Payroll in Self Manager, and how it affects your obligations for payroll.

Self Manager will be migrating to Single Touch Payroll Phase Two on Monday, 22nd May 2023. It is recommended that you go through the Manager Checklist as well as the Employee Checklist for each of your employees to ensure that you are compliant with the requirements of this new phase.

#What is Single Touch Payroll?

Single Touch Payroll is a method of reporting developed by the Australian Government to better automate and improve the reporting of payroll and taxation data to the Australian Tax Office (sometimes referred as the ATO).

It was released on the 1st July 2018 for large companies and entities, and the 1st July 2019 for all other companies and employers including sole traders, and is designed to replace manual reporting methods used previously for payroll, such as payment summaries, and provide the ATO and other Government bodies (such as Services Australia / Centrelink) the necessary information to inform employees of their current income and tax and correctly pay employees for services and schemes.

Single Touch Payroll is generally implemented into STP-compliant payroll software like Self Manager, and ensures that any payroll actions that you take are reported promptly to the ATO for review and for providing to the employee in myGov. If your employees receive benefits, it will ensure those benefits are being calculated on correct information to minimise any potential underpayments or overpayments. The ATO routinely reviews the submissions made by STP-compliant software and inform operators of that software, like Manage It, if there's any discrepancies.

With Single Touch Payroll in place, employees are able to check their income earned and tax withheld in near real-time through the myGov website or app and ensure that their employer is correctly paying them and reporting the necessary information to the ATO.

Single Touch Payroll works on the concept of "year-to-date", meaning that totals are reported to the ATO from the 1st July of the financial year, and then increase

#How is Single Touch Payroll implemented in Self Manager?

Self Manager is designed in such a way that Single Touch Payroll is, more or less, invisible to the subscribers of Self Manager - if you have been processing payslips in Self Manager and operate under an Australian Business Number (or ABN), these are already being reported through Single Touch Payroll.

Some employee and manager information that used to be optional before in Self Manager was made mandatory if it was required for Single Touch Payroll. These included fields such as:

• Employee Address
• Email Address
• Taxation settings such as Residence status and certain fields for offsets.

We have provided a Manager Checklist and an Employee Checklist that covers all details that are required for Single Touch Payroll. It is recommended that you review these and ensure that all details are up-to-date.

#What is Single Touch Payroll Phase Two?

Phase Two of Single Touch Payroll is the next update to Single Touch Payroll, and involves reporting more data to the ATO as well as stating with more detail what the income earned by an employee is made up of. For example, the following major changes were made:

• Certain types of gross income - for example, certain types of leave, bonuses and commissions, and some allowances - that were previously all rolled in with your main income now must be reported separately.
• Superannuation income is now more thoroughly reported.
• Payments for leave - especially if they were paid out in lieu of leave - are now reported in greater detail.
• More information is sought from the ATO with regards to termination payments, including redundancies and death benefits.
• If businesses have more than one income stream, as opposed to just salary and wages, these are now reported in more detail.

As with the original Single Touch Payroll, Phase Two has been implemented into Self Manager in a way that it is mostly invisible, so you may continue to process payroll in the exact same way as you have previously. However, some employee information may need to be updated in order to be compliant with Single Touch Payroll Phase Two. We have provided a Manager Checklist and an Employee Checklist to assist with this process.