STP has kicked in from July 1 and most employers with 20 or more employees should have already started reporting their employees' salaries and wages, pay as you go withholding and superannuation information to the ATO each payday.

More than 124,000 employers have already started reporting through STP. More than half of these are small employers who have voluntarily transitioned ahead of July 1.

The ATO understands the move to digital reporting may be a big change for some small employers.

They can start reporting any time from July 1 to September 30 and still be reporting on time. There's also help and support for employers that might need more time beyond that.

ATO Assistant Commissioner, Jason Lucchese said Single Touch Payroll was an important change.

"It will deliver benefits for both employers and employees by streamlining payroll processes and providing greater visibility for the ATO in regards to unpaid super or late payments," Mr Lucchese said.

Tim Hoopmann, Founder of Spinn Business Solutions, recently transitioned to STP and said employers shouldn't put it off.

"My advice to other businesses out there is that they should look at STP as an opportunity, it makes life easier by automating as much of the payroll process as possible and helps you keep on top of your cash flow," Mr Hoopmann said.

Single Touch Payroll is part of the ATO's plan to digitise and streamline tax and super reporting and make it part of doing business, while providing greater visibility of your employee's super.

"There will be no penalties for mistakes or late reports for the first year, and if you are experiencing hardship or operate in an area with limited internet capabilities, there will be exemptions available," Mr Lucchese said.

For micro employers with one-to-four employees, there are low-cost and no-cost solutions available. You can view the list of registered products at www.ato.gov.au/stpsolutions.

Employers with 1-4 employees will also have the option for their registered tax or BAS agent to report their STP information quarterly, rather than each time they run payroll. This option will be available until 30 June 2021.

Small employers who haven't yet transitioned to STP can visit www.ato.gov.au/stp for information.

If you have payroll software, speak to your provider to find out if your product is ready or when it will be.

If you don't have software, choose a product that offers STP. You can ask your registered tax or BAS agent for advice on choosing a product that suits your business needs.

Update your payroll software when it's ready.

Start reporting to the ATO through STP.

Visit www.ato.gov.au/stp for information, resources, news and detailed guidelines.