The STP pay event is an approved form submitted to the Commissioner of Taxation. Each time it is lodged it requires a declaration that the:
- information contained in the approved form is ‘true and correct’
- declarer is authorised to lodge the approved form.
We have streamlined the process for clients to authorise their registered agent to act on their behalf. By drafting and signing a written agreement called an 'STP engagement authority', eligible employers can provide this authority to the registered agent once a year instead of at each pay event.
STP engagement authority
The STP engagement authority is a written agreement providing evidence that a registered agent is:
- authorised to prepare STP pay events on behalf of an employer
- allowed to make the relevant declaration to the Commissioner when each STP pay event is lodged.
The STP engagement authority is:
- subject to eligibility criteria
- must only be used for lodging an STP pay event.
The authority must be reviewed and re-signed by an employer and their registered agent either:
- every 12 months
- any time there has been a significant change in the industrial relations, taxation or payroll process.
Eligibility for the authority
To be eligible to provide a registered agent with an STP engagement authority, the employer must not:
- have any overdue activity statement lodgments
- have any outstanding debts, unless they are covered by a payment arrangement or subject to review
- currently be, or have been within the last two years, the subject of ATO compliance activity for PAYG withholding
- have a company director who has been issued with a Director Penalty Notice (DPN) in relation to this company or any other company where they are or have been a director.
What to include in the authority
The STP engagement authority should:
- outline the responsibilities of both parties
- include:
- the agreed terms of the employer’s collation of payroll related inputs
- their process for calculating and paying their employees
- their taxation and superannuation obligations.
It is expected the declaration will include the following statement:
- The STP engagement authority may only apply for a period of no longer than 12 months. This is to ensure the employer and the registered agent have reviewed and agreed on the terms of the arrangement in line with industrial, taxation and business changes impacting the payroll.
Both the employer and registered agent should:
- co-sign the agreement
- keep a copy for their records.
You do not need to provide a copy to us unless asked.
Exclusions
The STP engagement authority does not apply to:
- other approved forms
- the finalisation declaration.
A registered agent must still obtain a signed declaration in writing from an employer before making the STP finalisation declaration on behalf of the employer.
Employers may authorise their registered agents to act on their behalf for Single Touch Payroll (STP) through an annual agreement.