How does STP work?
Using STP means you will electronically report all employee payroll information to the ATO. The reporting is based on your payroll cycle, so whether you pay on a weekly, fortnightly, or monthly basis will dictate how often you report.
STP provides greater efficiency to business owners, and to the ATO. Reporting employee salaries or wages, Pay As You Go withholdings, and superannuation is streamlined. This system also allows the ATO to accurately determine eligibility for Jobkeeper payments. This increased accuracy is because STP allows the ATO to match employee data provided by businesses to data provided by superannuation companies about those same employees.
Your payroll system must be connected to the ATO. It’s crucial to ensure that employee tax and superannuation information is submitted at each payroll cycle.
Processing payroll can continue as usual; your employees will be paid as usual, and receive a payslip. On the back-end, a step in the process will push the required reporting directly to the ATO once the payroll cycle has been completed.
To confirm that employers will receive the subsidy for eligible employees, the ATO will use data from STP to administer the Jobkeeper system. Businesses will need to make sure employees remain registered through STP in order to receive the payment.
Please note that a business must be up to date with BAS, tax lodgements, and payment obligations to receive the stimulus payments without delays.
Advantages of STP
Using STP offers efficiency, accuracy, and improved transparency to the tax system. Businesses may connect to the ATO through existing software in use, like MYOB. Payroll processes may be improved, saving time and increasing accuracy.
Fundamentally, STP can simplify payroll processes for your business.
Employers save time and reduce mistakes, while reporting employee payments is no longer as onerous. Using a cloud-based software system will allow for automatic submission of payroll information to the ATO; this eliminates the need for annual PAYG summaries, freeing up crucial resources at end of year reporting periods.