Frequently asked questions
Single Touch Payroll (STP) reporting is currently available through payroll, accounting and business management software. Xero is STP ready and available for anyone who wants to report salaries and wages, PAYG withholding and superannuation directly to the ATO with confidence and security.
Single Touch Payroll applies to all small businesses in Australia. Employers with 20 or more employees should already be reporting through Single Touch Payroll. Employers with 1- 19 need to start reporting from of July 1 2019. Xero is Single Touch Payroll ready so you can start reporting at any time.
Single Touch Payroll works by sending tax and superannuation information from your payroll or accounting software to the ATO as you run your payroll. The way STP information is sent will depend on the software you use. With Xero Payroll connecting to the ATO is done just a few simple clicks. Employees will be able to see their YTD tax and superannuation information through myGov. See the ATO website for further information.
Single Touch Payroll started from 1 July 2018 for employers with 20 or more employees, you should already be reporting through Single Touch Payroll. If you're not sure if STP applied to you during the 2018–19 financial year, you can do a headcount (not a full time equivalent) to check if you had 20 or more employees.
It is now mandatory for all employers in Australia to adopt a compliant payroll solution from 1 July 2019. You can start filing Single Touch Payroll before 1 July and STP is available on all Xero subscription plans.
If you have four or less employees and don't currently use payroll software you can now start reporting Single Touch Payroll through Xero's Payroll Only plan at a low cost of $10/month.
Customers need to run both the Payroll Activity Summary and the General Ledger report, and ensure amounts are matching in the relevant accounts. Xero Central lists which accounts should be matching with which sections of the payroll report.
Terminated employees will appear when completing the STP finalisation, as long as they've had earnings included in pay runs within the financial year.
Firstly check that you haven't posted any manual journals to the payroll accounts, haven't started on Xero midway through the year and that your opening balances and conversion balances were entered correctly. If you're having trouble finding the discrepancy and what it relates to, we recommend that you look at the reports over a shorter time frame to see at what point it became unbalanced.
Once opted in to STP, lump sums need to be processed through pay runs. If the lump sum is related to a redundancy payment, Xero will automatically report leave as lump sum A. If you use the redundancy pay item, Xero will automatically report the amount on this pay item as lump sum D. For other lump sum types, or for adjustments, you'll need to use adjustment pay items. Xero Central has the full steps on this.