Introduction to Single Touch Payroll

As of July 2018, Single Touch Payroll, or STP, is the new way that employers (with 20 employees or more) will report to the ATO. It means that payroll and superannuation data is reported electronically every time staff are paid, instead of annual reporting.

Legislation

Who is obliged to report? STP forms part of the ‘Budget Savings (Omnibus) Bill 2016’ and requires Employers to report their employee earnings for each pay event (payrun) as that event occurs.
When am I obliged to start reporting? For employers with 20 or more employees (as at 1st April 2018), STP came into effect on the 1st July 2018 unless either the employer or their payroll service provider have a deferral in place. If you have fewer than 20 employees, you must commence STP reporting from 1st July 2019 (subject to legislation being passed in parliament), although you may commence STP reporting at an earlier date if you wish.

Events

Events are the transactions that you will be sending to the ATO. There are two kinds: Pay Events (PE) and Update Events (UE).

Pay Event (PE)

This is the most common type of STP transaction and will typically be run at the completion of each payrun, after the pays have been processed through to the bank.

The PE will send the updated YTD earnings, tax and SGC information to the ATO for processing. This information will then update the employee’s myGov account as well as pre-fill the relevant W1 and W2 labels on your company BAS. This process is performed via the new STP Processing screen in HR3 payroll. The process for sending your PE data to the ATO is covered in a following chapter. For those customers that currently use the Clicksuper Superannuation functions in HR3, this new PE process works in a very similar manner.

IMPORTANT: as an employer you are still responsible for ensuring that the W1 and W2 amounts on the BAS are correct as there are scenarios where the amounts pre-filled from STP will be incomplete. These include;

commencing STP processing part-way through your BAS reporting period
transitioning from one STP compliant payroll system to another part-way through a BAS reporting period
any payroll values that are adjusted via an STP “Update Event” (see below), as these do not update the W1 and W2 pre-fill amounts.

Update Event (UE)

An update event is used when the employer needs to update the information that has previously been sent to STP for one or more employees. This could be for various reasons;

A correction to a previous pay for one or more employees (this may also be done via a subsequent PE)
An off-cycle payrun for one or more employees (this may also be done via a subsequent PE that includes all the corrected employees)
Updating employee YTD balances when commencing STP part way through a year
Setting YTD figures back to zero if changing payroll service providers part-way through a year and migrating the YTD balances to the new system.
Once you have finished processing all payrun transactions for a financial year, the UE is used to set a “Finalise” flag for each employee. This is the equivalent of the old ATO Payment Summary EOFY process.

What Information is sent to the ATO via STP?

As well as the YTD earnings, tax and SGC information, each PE and UE will include the following employee information. As indicated, some of this information is mandatory, while other information is optional for STP, though if present in your HR3 data it will always be sent.

HR3 Field	Mandatory / Optional	Notes
Employee Details
TaxFileNo	Optional	Must be valid if supplied
Contractor ABN	Optional	Must be valid if supplied
Employee No.	Mandatory
Surname	Mandatory
First Name	Optional
Birth Date	Optional	Must be valid date if supplied
Address line 1	Mandatory	HR3 sends 'Preferred' address
Address line 2	Optional
Suburb	Mandatory
State	Optional	Not required for non AU addresses
Postcode	Optional	Not required for non AU addresses
Country	Optional	Not required for non AU addresses
Email	Optional	HR3 sends Kiosk email
Phone Number	Optional	HR3 sends 'Preferred' phone number
Hired Date	Optional
Termination Date	Optional
TFN Declaration Details
Terminated	Optional
Resident	Optional
Basis of Payment	Optional
Claim Tax Free Threshold	Optional
HECS / HELP	Optional
SFSS	Optional
Payee Declaration Acceptance	Mandatory	HR3 sends 'False'
Declared Date	Optional

See the following pages for further STP information:

Setup: Commencement and Preparation

Submitting Events: Single Touch Payroll Processes

Exporting local copies of STP Events

Off-Cycle Payruns and corrections

STP Frequently Asked Questions