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Single Touch Payroll – How will that affect my Business?

Starting from the 1st of July 2018 employers with 20 or more employees will have new reporting obligations regarding payroll processes through Single Touch Payroll (STP).

Employers will have to report to the ATO each time they pay their employees, without the need to change pay cycles. The information required will include employees’ wages and salaries, allowances, deductions & other payments, PAYG withholding and superannuation information. While employers can continue to use their existing payroll software they need to do a headcount on 1st of April 2018 to determine their current obligation to report through STP as shown below.

For employers with 20 or more employees:

  • You need to start reporting through STP from 1 July 2018 if your software is ready.
  • Some payroll software providers have asked the ATO for more time to update their products, therefore you are encouraged to check if your product has a deferred start date.
  • If your software is ready by 1 July 2018 but you are still not, you will need to apply for your own deferred start date.

For Employers with 19 or less employees:

  • STP will be mandatory from 1 July 2019, subject to legislation passing in parliament.
  • You can, however, voluntarily choose to report through STP before 1 July 2019 if your software is ready.

Adopting STP will come with several benefits for employers as well, namely:

  1. The obligation to provide employees and/or the ATO with payment summaries will be fulfilled through STP. This includes individual non-business, foreign employment income and employment termination payments (ETP) payment summaries.
  2. Activity statement compliance efficiencies will be obtained, such as: The requirement for the employer to lodge a tax file number (TFN) declaration with the ATO will be removed.
  3. Validated employee data will be available to an employee through MyGov and to STP compliant solution providers.
  4. The STP report will be reported as year to date (YTD) balances and will allow employers to make adjustments (even for a prior payroll period) in future period reports. This feature potentially gives employers a lot of flexibility to correct errors and omissions in subsequent pay runs.
  5. The ATO will be able to recognize and deploy early assistance to employers struggling to meet their employer obligations.

 

To be exempt from giving payment summaries however, employers may need to make a finalization declaration to the ATO.

For further queries (if any), contact us at 9240 4211 or email us at admin@fortunaadivisors.com.au

 

Source: ATO website