The Single Touch Payroll flight plan

 

The Budget Savings (Omnibus) Bill 2016 was enacted on 16 September 2016 – making Single Touch Payroll (STP) a legislative requirement in Australia. STP will lead to transparency in payroll reporting and level the playing field to ensure that all employers are meeting their employer taxation obligations. Advantages include, Auto reporting, Activity statement compliance efficiencies, and Validated new hire data.

This legislation along with other Federal Government initiatives such as MyGov and SuperStream, are momentous leaps forward in the Australian Government’s Digital by Default agenda. Not since the introduction of PAYG in 2000 have we seen a piece of legislation with this level of impact for all employers and employees. The ATO’s direction is that every employer is going to need an STP solution.

 
 

Calling Australian businesses to board for STP reporting’

There are two boarding calls for STP.  The ATO has stipulated mandatory STP reporting commence for businesses with 20 or more employees (known as ‘substantial employers’), on 1 July, 2018.

The second boarding call is for all businesses with 19 or less employees, you can opt to report via STP from 1 July, 2018. The ATO has proposed that it will be mandatory for employers with 19 or less employees to commence reporting from 1 July, 2019.  This proposal is subject to legislation being passed in parliament.
Some businesses are exempt – find out if this applies to you.
 

 
 

What changes for my business?

STP reporting will result in some changes for employers and the payroll process.

 
  • STP reporting every pay event – including salaries and wages, allowances, deductions and other payments, PAYG withholding and superannuation. This is no longer an end of year process.  You’ll be reporting with every pay run.
  • Business Activity Statement - for small and medium withholders, after 1 July 2018, labels W1 and W2 will be prefilled. For large withholders, you will not have to report PAYG withholding through your BAS.
  • New options for payment summaries – as an employer you may not need to provide your employees with payment summaries at the end of a financial year – employees can access this end of year data via their myGov account. 
 
  • myGov – reporting via STP will allow employees to access their year-to-date tax and superannuation information via their myGov account at any time.
  • Superannuation - there will also be some changes to how superannuation is reported to the ATO, but no change to the way superannuation is paid. The STP report will provide the ATO with the calculated superannuation obligation for each employee. When payments are made to employees’ funds, the information will be reported to the ATO by the superannuation fund.
 
 

But… not everything will change

Some things will remain the same after the introduction of STP.  Employers do not need to change:

  • Current payroll frequency - Employers can continue to pay employees weekly, fortnightly or monthly.
  • Payment due dates for PAYG withholding and superannuation contributions.  However, you can choose to make these payments earlier.
 
 
 

Key STP Dates

16 September 2016
Budget Savings (Omnibus) Bill 2016 was enacted, making Single Touch Payroll (STP) a legislative requirement in Australia.

1 April, 2018
Head count day – you need to count the number of employees in your business. For more information on Head count day, refer to ADPs Head count guide.

1 July, 2018
STP mandatory reporting commences for businesses with 20 or more employees.

1 July, 2019
ATO proposed STP mandatory reporting to commence for employers with 19 or less employees (this is subject to legislation being passed in Parliament).

 
 

Let's talk about your Single Touch Payroll itinerary

 

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