Are you ready for Single Touch Payroll – 1 July 2018?
Single Touch Payroll is the single biggest move toward payroll centralisation since PAYG was introduced in 2000 and one of the most significant changes to the way in which payroll is processed that we have seen. It involves streamlined reporting for salaries, wages, PAYG and superannuation and aims to introduce transparency in payroll reporting to ensure employers are meeting their obligations.
If you haven’t found a simple, user-friendly Single Touch Payroll solution for your business, now is the time to make a change as the 1 July deadline for implementation is fast approaching!
What Does Single Touch Payroll (STP) Mean For Businesses?
From 1 July 2018 all businesses with 20 or more employees, regardless of whether they process their payroll in-house or use an outsourced payroll service, will be required to report the gross earnings, tax and superannuation of all employees electronically to the ATO every pay cycle. This will have to be done the day before the payment or on the day of the payment.
As information is being reported in live time, BAS and Activity statements will be pre-filled with PAYG data ready for payment. It will also negate the need for the preparation of end of financial year PAYG Payment Summaries for all employees.
The correct reporting can only be achieved with Single Touch Payroll compliant software. Therefore all employers must check with their current software provider or payroll cloud service, that it has been updated accordingly.
What About Small Businesses With ‘Fluid’ Staff Numbers?
Only ‘substantial employers’ – those with 20+ employees – are legally mandated to report from July this year, while those with 19 or less may report voluntarily.
It is important to note however that once you begin reporting through STP as a ‘substantial employer’, you will need to continue doing so even if employee numbers drop below 20 in the year. All employers, regardless of size and the number of employees, will be mandated to report through STP by 1 July 2019. Some exemptions may be granted by the ATO in extenuating circumstances.
What Does It Mean For Your Employees?
When the information is received and validated by the ATO, employees will be able to view this information in their MyGOV account. This will allow them to track the payments made, including their superannuation and taxation, throughout the year.
It is envisaged that it will help the ATO to better track any potential shortfalls in PAYG and allow the employee to have extra tax deducted prior to having a tax debt at year end. STP will also allow the ATO to cross match data with superannuation funds, creating a fairer playing field for all employees (and employers) as any unpaid superannuation should be picked up quickly due to data matching of payments.
Need More Single Touch Payroll Information?
With only days to go until Single Touch Payroll is introduced, businesses are encouraged to double-check their in-house payroll systems, and any outsourced payroll services they use, for compliance.
E-Payoffice can assure all of our clients that our cloud based payroll services are fully compliant and we have been white-listed and approved as an STP provider by the ATO.
How Does Single Touch Payroll Work?
Resources for further information:
What is Single Touch Payroll (STP)?