Single Touch Payroll was the biggest change to Business reporting since the introduction of GST. Legislation required all businesses to report employee payroll information to the Australian Tax Office after every pay run. It had already been rolled out for employers with over 20 employees in July 2018 but July 2019 saw smaller businesses being obligated to jump on board the STP freight train. From 1 July 2019 all businesses were to file their payroll information with the ATO through their portal after every pay run.
Once an employer started reporting through Single Touch Payroll (STP), employees were able to see their year-to-date tax and super information online. This was available on myGov. It also meant that at year end, employers do not have to supply Payment Summaries to employees as the ATO already has the information. The idea behind STP is that the ATO will know the super and PAYG liabilities of all businesses throughout the year rather than just at year end.
During the COVID-19 crisis, this same system was used for the collection of data to successfully deliver the Job Keeper wage subsidy to eligible employers.
In the 2019–20 Budget, the Government announced that Single Touch Payroll (STP) would be expanded to include additional information. This expansion of STP (also known as STP Phase 2) will reduce the reporting burden for employers who need to report information about their employees to multiple government agencies. It also supports the administration of the social security system. The mandatory start date for STP Phase 2 reporting will be 1 January 2022
For more information, check out the ATO website