Single touch payroll (STP) has three primary elements to it:
1. Payroll reporting
2. Super payment reporting
3. Employee commencement
Payroll reporting is your payroll system advising the ATO each time an employee is paid, (at the same time the payslip and payments are being made), the year to date values of salary and wages (or OTE), PAYG tax withheld and the amount of superannuation accrued to be paid by the employer.
Payroll reporting also includes the W1 (gross salary and wages) and W2 (PAYGW) values for each pay cycle. Note these are the amounts of gross salary and wages for the “pay period”.Software should be able to create and provide this information on behalf of the employers.Only payroll reporting is being considered as the implementable legislated obligation for employers.
Super payment reporting has been rethought and fortunately it may end up that the employers will not have to provide the super payment information to the ATO. Current thinking is that the super funds who receive the payments will then report to the ATO that they have received payments on behalf of employees. This provides an independent check of the super payments being reported.Employee commencement is what you do now to document that you have employed a new employee. STP will enable enhanced processes about software interacting with the ATO to verify the employee’s details, including TFN declarations, super choice forms and validation of the information.