Single Touch Payroll
Starting from 1st July 2018, Single Touch Payroll (STP) will be mandatory for businesses that have 20 or more employees on 1st April 2018. Draft legislation proposes extending mandatory STP reporting to businesses with 19 or less employees from 1st July 2019, however these employers are able to voluntarily op-in beforehand.
What information is reported through Single Touch Payroll?
These measures are aimed at improving the Government and ATO’s visibility, as well as detecting non-compliance in real time. Through STP employers will report their payroll information such as salaries and wages, allowances, PAYG withholding, superannuation guarantee liabilities and other one-off payments at the time employees are paid. It is optional for an employer to report reportable fringe benefits and reportable superannuation employer contribution amounts through STP.
How do I work out how many employees I have?
Employees included are full-time and part-time employees, casual employees that were on the payroll on 1st April 2018 and worked during March 2018, overseas based employees, employees that are absent or on leave (paid or unpaid) as well as seasonal employees. Excluded from the headcount are employees who ceased work prior to 1st April 2018, casual employees that did not work during March 2018, independent contractors, staff that are provided by a third-party labour hire organisation, company directors, office holders and religious practitioners. If a business is part of a wholly-owned group of companies, the headcount includes all employees of the members of the group. There are no grouping rules for trusts, partnerships or sole traders. Also there are no special headcount rules or concessions for family members and other related parties employed by closely held entities.
Does this impact other obligations?
It should be noted that STP rules have no relevance to State employer obligations such as payroll tax and workers’ compensation. Also there is no change to employer obligations regarding the timing or amount of the payment of PAYG withholding, superannuation contributions, and other employee-related liabilities.
What to do next?
The ATO will not be providing its own STP compliant software solution and there will be no ability to lodge STP information via the ATO Portals. Therefore, employers with a headcount on 1st April 2018 of 20 or more should check with their payroll software providers and upgrade their current payroll software, or acquire compatible software before 1st July 2018. Where a particular payroll provider will not be ready, the ATO may provide a deferral that covers all affected clients of that provider. Alternatively, businesses may choose to engage third parties such as their accountant, bookkeeper or payroll provider to assist with their ongoing STP reporting obligations.
If you’re in need of getting STP-compliant, contact our office as soon as possible to be ready to go on the 1st July!
Contributed by Campbell Liggins.