Single Touch Payroll for everyone
Single Touch Payroll (STP) has changed where every employer will be required to use the system from 1 July 2019. If you are still using a manual system to pay your staff, you will need to change soon.
If you haven’t started using STP yet, you will need to do the following before 1 July 2019:
- update your payroll system so that it can complete STP requirements, or
- engage with us to complete these payroll reporting requirement for you.
What is STP
Employers will need to report the following through their payroll system:
- payments made to individuals and amounts withheld from those payments
- payments of salary or wages and ordinary time earnings (OTE), and
- employee superannuation contributions.
Also, other amounts such as “sacrificed ordinary time earnings amounts” and “sacrificed salary and wages amounts” will be reportable.
The objective of these additional reporting requirements ensures that superannuation guarantee is not reduced by amounts salary sacrificed.
These amounts, along with ordinary time earnings and superannuation contributions can be reported either separately or combined. Either way, the ATO has stated that they will be aware of an employee’s overall package from which they work out their superannuation guarantee.
Payments not made through the payroll system (eg contractor payments, payments of superannuation income, payments of dividends, interest and royalties, etc) are excluded.
“From 1 July 2019, every employer will be required to adopt STP — this includes employers currently using a manual system to pay staff.”
PAYG payment summaries
There will no longer be a requirement to provide employees with PAYG payment summaries at year end.
Essentially, the employees will be able to see their payment summaries at year end online from myGov and also they will be available on the Tax Agent Portal.
For more information, please do not hesitate to contact us.
Martin van der Saag
Partner
T: 02 9984 7774
E: martinv@northadvisory.com.au
Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au
About the author
Cayle Petritsch - Director & Wealth Advisor
Cayle Petritsch, Director and Wealth Advisor, works with our existing clients who have recognised the importance of business owners making strategic financial choices not only for their company, but for their personal finances too.
Cayle saw a great opportunity to expand North Advisory’s services into SMSF/superannuation, personal wealth management, asset protection services and other crucial personal finance facets that business owners need to consider.
His approach to wealth management allows you to receive highly personalised wealth advice. Working closely with Marius, Cayle understands the unique needs of every client, from their lifestyle and business goals to their retirement plans.
Key Takeaways
STP is mandatory for all employers in Australia since mid-2019 —
regardless of business size or number of staff.
Payroll data is now reported in real time —
each pay run triggers automatic reporting of wages, tax and super to the ATO, improving accuracy and timeliness.
The burden of end-of-year payment summaries is removed —
employers no longer need to generate manual payment summary forms; STP handles year-to-date records.
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Frequently Asked Questions
What is Single Touch Payroll (STP)?
STP is a system where employers report employee payments — wages or salaries, tax withheld (PAYG), and superannuation contributions — to the Australian Taxation Office (ATO) every time they run payroll. This replaces the old annual payment summary process.
Who must use STP and by when?
All Australian employers must use STP. Employers with 20 or more employees began under STP in July 2018; from 1 July 2019, the requirement extended to employers with fewer employees — effectively making it universal.
What information do employers submit under STP?
Employers must report details including ordinary time earnings (wages/salary), PAYG withholding tax, superannuation contributions, and any salary-sacrificed amounts or other reportable payments.
Does STP replace end-of-year payment summaries for employees?
Yes. Once STP is in place and pay-events are reported each pay cycle, employers no longer need to issue a separate payment summary at year-end; employees can access their income statements via their online ATO/myGov portal.
What are the benefits of STP for employers and employees?
For employers: less paperwork, more streamlined payroll compliance, and reduced end-of-year admin. For employees: up-to-date visibility of their year-to-date income, tax withheld and super contributions via online portals.
What tax policies did the Federal Opposition (ALP) propose?
The Federal Opposition’s tax policies under the Australian Labor Party (ALP) focused on changes aimed at fairness and revenue reform, including proposals such as removing tax concessions for housing investors, adjusting negative gearing, and limiting capital gains tax (CGT) discounts for high-wealth individuals — signalling a shift toward broadening the tax base and reducing concessions for investment property owners.
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