It may be worth dusting off last year’s PAYG summary. It is about to become a collector’s item. Single Touch Payroll is with us, and it’s changing the way your wage or salary is recorded.
If your workplace has 20 or more staff, the boss should have started using Single Touch Payroll (STP) last July. If there are fewer than 20 employees, STP kicks off from 1 July 2019.
Here’s what you need to know.
What is Single Touch Payroll?
STP is designed to make payroll reporting easier for employers. Instead of juggling a raft of paperwork, your boss reports payroll details including super payments, to the Australian Tax Office (ATO) on or before each pay day. That’s done using payroll software that sends your pay details (and superannuation details) directly to the ATO.
You’ll still be paid the same way. It just means details of your pay and tax withheld go direct to the ATO in ‘real time’ – as it’s paid, instead of once at the end of the year.
Income Statements Replace Your PAYG
A big change of STP is that your employer won’t have to provide a PAYG or summary at the end of the year. The PAYG is now the “Income Statement” but it is not a document they will necessarily give to you.
That doesn’t matter too much. You don’t need a summary to do your taxes. Etax (and any tax agent) will find the summary automatically, plus other info that’ll save you time and taxes.
With STP, some employers might also stop giving you regular pay slips. Instead, STP lets you access details of your pay and tax paid at any time via the myGov portal.
Is STP good for unpaid super?
STP also lets you check if the boss has stayed up to date with your super contributions. That’s a good thing. An estimated one in three Australian workers are robbed of about $2,000 each year by employers refusing to pay super.
Potential risks for employees
STP can have drawbacks if you work more than one job. The ATO can potentially use STP to identify employees claiming multiple tax-free thresholds.
If that sounds like you, it’s worth letting one employer know that you’re not entitled to the tax-free threshold. It may mean paying more tax. But at least you’ll minimise any end of year tax bill, and avoid copping a ‘please explain’ from the ATO.
Etax has STP covered
A new system can feel uncomfortable, especially when your pay is involved. But STP is really quite straightforward, and the good news is the Etax has STP covered.
That means Etax will get all the info needed for your tax return, automatically. You don’t have to find an income statement and you don’t have to use myGov to access your records.
Just start filling out your tax return and your data should populate automatically. Or, to make tax time even easier, contact your Etax accountant directly, who can look after the whole process for you.