Single Touch Payroll (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.
How to count your employees1
Include in your headcount:
- Full time employees
- Part time employees
- Casual employees who are on your payroll on 1 April and worked anytime during March
- Employees based overseas
- Any employee absent or on leave (paid or unpaid)
- Seasonal employees (staff who are engaged short term to meet a regular peak workload, for example, harvest workers)
Don’t include in your headcount:
- Any employee who ceased work before 1 April
- Casual employees who did not work in March
- Independent contractors
- Staff provided by a third party labour hire organisation
- Company directors
- Office holders
- Religious practitioners
Directors, office holders and religious practitioners are not included in the headcount as they are not considered employees within the common meaning of the term. However, when you start reporting through STP you will need to report their payment information. This is because the payments are subject to withholding and are currently reported in the Individual non-business payment summary.
What do I do now I know my headcount?
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.
How can Nexia Edwards Marshall NT help you?
The ATO is continuing to refine STP prior to implementation. 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.