Single Touch Payroll – July 1 2018 Deadline for Employers with 20+ Employees

 

The ATO has been talking about Single Touch Payroll (STP) since as early as 2014, however, it hasn’t been until recently that information around what single touch payroll is and how it will affect employers has become clearer.

 

What is STP?
STP is a change in the way employers will report their PAYG and super contribution information to the ATO. Employers will now be required to report PAYG and super after a “payroll event” – essentially after each pay to employees has been processed (be that weekly, fortnightly or monthly) – rather than previously reporting monthly or quarterly. In addition to PAYG, super contributions will also be required to be reported, which previously was not a requirement. These will then be reconciled on your monthly or quarterly IAS / BAS lodgements.

How does STP benefit employers?
The main benefits for employers with STP are that it will streamline the process of reporting to the ATO by being able to submit payroll information at the completion of each payroll. By doing this the ATO will be able to pre-fill the BAS (W1 and W2) for employers, eliminating potential errors and double handling. Additionally, the need to generate and distribute payment summaries may be eliminated for employees as this information will be made available online via myGov. Finally, the ATO may allow employers to collect tax file declaration and super choice information online via myGov when onboarding new employees.

When will STP come into effect?
For employers with 20 or more employees, STP reporting will be mandatory from July 1 2018. For employers with 19 or less employees, it is expected that STP reporting will be mandatory from July 1 2019. It’s important to note that you need to do a “headcount” on April 1 2018 to determine if you have 20 or more employees, each employee must be counted including casual and part-time employees. Even if you drop under 20 employees by July 1, you may still be considered a substantial employer and be required to use STP reporting, so it’s important that you perform a headcount in April.

How will this affect my payroll?
In essence, nothing will change in how you process payroll. The main change is that after each “payroll event” your payroll software provider will need to send some additional reporting information to the ATO. If your software provider doesn’t support STP by July 1 2018 and you employ 20 or more employees, you may need to look for an alternate software provider to ensure compliance. Highview can assist you in this process, speak directly with your Accountant.

For those not currently using accounting software (i.e. those using manual cashbooks or excel) You must act now. You’re required to be using compliant software prior to July 2018. Speak to your Highview Accountant immediately to organise a software program and training that meets your business needs.

Frequently Asked Questions
Q: Will I still need to submit a BAS?
A: Yes – you’ll still need to submit a BAS, but the W1 and W2 values will be pre-filled.

Q: Will I be able to adjust the pre-filled values on my BAS?
A: Yes.

Q: Will I still need to submit an annual payment summary report?
A: If you use single touch payroll reporting, you may not need to submit a payment summary report. We’re still awaiting final clarification on this.

Q: Will I still need to generate payment summaries for my employees?
A: If you use single touch payroll reporting, you may not need to submit a payment summary report.

Q: Can I make PAYG or super payments through single touch payroll?
A: No, single touch payroll is a reporting solution only. You will still need to make PAYG and super payments separately.

Further questions?
If you have any immediate concerns in relation to STP, please address these to your Highview Accountant.

Cranbourne: 03 5990 1000
Prahran:
03 9529 1566
Mornington:
03 5911 2100