The Australian Taxation Office is changing the way that employers report tax and superannuation information with the introduction of Single Touch Payroll.
What is Single Touch Payroll (STP)?
STP is a reporting change that will have employers report payments such as salaries and wages, pay as you go (PAYG) withholding and superannuation information to the ATO directly from their payroll software at the same time as they pay their employees.
From 1 July 2018, any employer with 20 or more employees, will need to report to the ATO through STP. For employers with 19 or less employees STP will apply from 1 July 2019, subject to legislation being passed. A headcount of employees on 1 April 2018 will determine when you need to commence STP reporting.
Employers who report employee details through STP will not have to provide employees with Payment Summaries at the end of the year or provide the ATO with Payment Summary Annual Reports. Employees with have access to their payroll information via their myGov accounts.
What does this mean for employers with more than 20 employees?
Reporting to the ATO is required through STP payroll software from 1 July 2018. Payroll software providers are working on ensuring they are STP compliant and you should be receiving updates from them. If you haven’t heard from your payroll software provider, check their website or contact them directly to ensure that they are working towards meeting the 1 July deadline. If your payroll software is no longer supported you may need to consider upgrading to new payroll software.
Exemptions are available in certain circumstances including employers in rural areas with no internet access and seasonal employers. If an exemption is granted, you will continue to comply with the existing PAYG Withholding reporting obligations. Deferrals of the start date may also be granted in other circumstances, on request.
What does this mean for employers with less than 20 employees?
Reporting to the ATO will remain unchanged until 1 July 2019. It is possible to opt into STP reporting earlier, however waiting until the system is running smoothly may be a better option. Information for small employers with no payroll software is expected to be released at a later date.
What is reported to the ATO and when?
The following information is to be reported at the same time as employees are paid:
- gross payments, allowances, after tax deductions and PAYG withheld
- superannuation information
You can continue to pay your employees weekly, fortnightly or monthly. The data provided will be used to prefill labels W1 and W2 on the BAS.
The current payment due dates for BAS and super obligations remain unchanged. Employers can make payments of PAYG withholding and superannuation at the same time as they report under STP, but this is optional.
What do I do now?
If you are an employer with more than 20 employees on 1 April 2018, check with your payroll software provider to ensure you will be compliant. Review your payroll process to ensure that payroll items are correctly classified.
If you are an employer with less than 20 employees on 1 April 2018 reviewing your payroll process to ensure that everything is correctly classified will give you a head start on implementing STP in 2019.
The ATO is continuing to refine STP prior to implementation, updates are available on their website or via your Nexia Edwards Marshall NT consultant.
How can Nexia Edwards Marshall NT help you?
For any questions or to discuss any of the above in relation to your personal situation, please contact Sarah McEachern or your Nexia Edwards Marshall NT Adviser.
The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall NT. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall NT Adviser.