Single touch payroll - information for employers
What is Single Touch Payroll?
Single Touch Payroll (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 payroll has been processed – rather than previously reporting monthly or quarterly.
The general way and frequency you process your payroll won’t change as a result of STP.
As each pay run is submitted, this data will be transferred directly to the ATO and your Business Activity Statement will be pre-filled with the Wages and PAYGW payroll information. This will also potentially remove the need to submit Annual PAYG Payment Summaries to the ATO.
For employers with 20 or more employees, Single Touch Reporting will be mandatory from July 1 2018.
For employers with 19 or less employees, it is expected that single touch reporting will be mandatory from July 1 2019.
What needs to be done?
You’ll need to do a “headcount” on 1 April 2018 to determine if you have 20 or more employees. Note there are some exceptions, but the following should be used as a guide:
You need to include the following employees in your headcount:
- full-time employees
- part-time employees
- casual employees who are on your payroll on 1 April and worked any time 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).
Do not include:
- any employees 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
If you are part of a company group, the total number of employees employed by all member companies of the wholly-owned group must be included.
If you have a headcount of 20 or more employees on 1 April 2018, you’ll need to ensure that your current payroll software is STP compliant and able to transmit the necessary information to the ATO from 1 July 2018.
If you’re processing payroll using a cloud based accounting package (MYOB, Xero or Quickbooks Online) or a third party payroll provider, chances are you’ll be STP ready.
If in doubt, check with your current provider and ask them the question “will my software be STP compliant?”
The best time to act is now
Remember that if your headcount comes in under 20 people, you’ll still need to consider your current payroll arrangements to ensure that you’re also STP ready by 1 July 2019.
Get ahead early in upgrading your accounting and payroll systems to take advantage of some of the other great benefits offered by the latest software providers and products.
If you need help with transitioning to a solution that will be STP compliant, or have any other questions regarding Single Touch Payroll, get in touch with your McLean Delmo Bentleys advisor.