Single Touch Payroll (STP) will roll out for employers with more than 20 employees on 1 July 2018. Employers will need to do a headcount of the number of employees they have on 1 April 2018. If they have 20 or more employees on that date, they will need to start reporting to the ATO through a Single Touch Payroll-enabled solution from 1 July 2018.
Employers will be required to report on all employees within the ordinary (common law) meaning of ‘employee’. Excludes independent contractors, staff provided by a third party labour hire organisation, company directors, office holders, religious practitioners or any employee who ceased work prior to 1 April.
This information that will need to be reported will include payments such as salaries and wages, pay as you go (PAYG) withholding and super information at the same time you pay your employees. If an employer is reporting as they go, they may not need to provide the ATO with an end of year payment summary.
The Australian Government has announced it will expand Single Touch Payroll to include employers with 19 or less employees from 1 July 2019. This will be subject to legislation being passed in parliament.
Single Touch Payroll is basically a reporting change for employers. It means employers will report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO directly from their payroll solution at the same time they pay their employees.
Employers will need to check that their current payroll solution will meet these reporting requirements however the answer to this question may not be a simple yes or no at this time. The ATO are currently working closely with payroll software and service providers on the STP but until the final versions of the ATO technical documents are released the software providers cannot build the completed updates to their products. The ATO are aware that some software providers will not have their products ready by July 1st and in which case the software providers can provide evidence so that the ATO can consider deferrals for their customers.
Theres some benefits for employers reporting via a STP solution. These benefits also extend out to the employee.
- Employers who report an employee’s payment and withholding details through Single Touch Payroll may not have to provide that employee with a payment summary at the end of the financial year. The ATO will provide this payment and withholding information to employees through MyGov.
- Employees will be able to see their year-to-date tax and super information online through myGov as their employer transitions to Single Touch Payroll reporting.
- In future, some of the information reported through Single Touch Payroll will be used to pre-fill parts of the employer’s activity statement (labels W1 and W2). Large withholders will not have to report PAYG withholding through their activity statement.
- Over time, commencement forms for new employees can be completed online and some information will be pre-filled and validated. This includes Tax file number declaration, Superannuation standard choice form and Withholding declaration forms.
To see an overview of Single Touch Payroll click here.
