— SINGLE TOUCH PAYROLL: Everything You Need to Know by July 1, 2018
What is Single Touch Payroll (STP)?
It’s a federal government initiative to streamline your payroll reporting, and will fundamentally change the way you report payroll to the ATO from July 1, 2018. For now, STP affects employers with 20 or more employees, as at April 1, 2018.
From July 1, when you pay your employees, you’ll report payments including salaries, wages, PAYG withholding and super information, to the ATO, at the time of payment rather than at year end.
How to I comply with STP?
You can make your payments via your payroll or accounting software, as long as it’s updated to offer STP reporting. Most payroll providers are currently or have already updated their software. Best you speak with yours, to ensure they offer it too.
What does STP mean to my business?
Your payroll cycle doesn’t change. But, on payday, you will be reporting directly to the ATO payments including salaries, wages, PAYG withholding and super information. It doesn’t matter if your pay cycle is weekly, fortnightly or monthly – on every payday, you’ll be reporting directly to the ATO.
As such, your due date for these ATO payments, won’t change, and you can still choose to pay them earlier, if you wish.
Also, it may mean that you won’t be required to provide your employees with EOFY payment summaries for certain payments made through STP. The ATO will keep your employees updated via the MyGov website.
All STP reporting to the ATO, will be available for your employees so they can view their year‑to‑date tax and super information at any time. This will be via myGov.
How do I count my employees?
Critically, you need to understand how to ‘count’ your employees. Sounds crazy, right? Not really… here are the various factors to consider:
- Firstly, you need count the employees on your payroll as at 1 April, 2018 (this headcount is a self-assessment, so you don’t need to inform the ATO of the number of employees on your books)
- Next…. follow the guidelines below….
What about the software my business needs?
If you’ve got the software….
- If you’ve got 20 or more employees on April 1 2018, your payroll or accounting software needs to be updated by July 1, so you’re ready
- Speak with your software provider. Get confirmation from them of WHEN and HOW your software will be updated to comply with STP
- Your provider may have asked the ATO for more time to get ready: check with them to see if the ATO has given them a later start date (also called a ‘deferral’)
If you don’t have the software….
- Take a look at the software on the market, and those that provide Single Touch Payroll
- Speak with your registered tax or BAS agent about the products that are the best fit for your business
- Review the market, and select a solution ASAP
Let your agent do the work…
- If you’d rather your tax agent takes care of STP reporting to the ATO, that’s an option for you a well. They can report straight to the ATO on your behalf
Single Touch Payroll Timeline:
And if you require more information from the ATO, visit www.ato.gov.au/stp