In an effort to further digitise and improve the Australian tax system, the ATO (Australian Taxation Office) passed legislation for the Single Touch Payroll, a simple reporting solution that helps streamline the payroll process.
If your company is situated in Australia, by now you should have received a letter from the Australian Taxation Office outlining the important legislative changes to payroll reporting. According to the Single Touch Payroll (STP), if your headcount at 30th April 2018 is 20 or more employees, you will be required to report through Single Touch Payroll from 1st July 2018. If it is 19 or less you will be required to use STP from 1st July 2019. For anyone reporting manually, or are using a custom built system, you may need to make a change to your payroll solution to ensure that you are using an STP compliant solution.
Single Touch Payroll is a government initiative to streamline business reporting obligations. When an employer pays their employees under Single Touch Payroll, the payroll information will be sent to the Australian Taxation Office from your chosen payroll solution. This means all the data processed in your payroll, such as gross pay, PAYG and specific employee details, will be sent to the ATO with the payroll throughout the year.This means you will no longer be required to provide annual payment summaries to your employees. Now is a good time to plan an education process with your employees on the coming changes as annual payment summaries and earlier group certifications have been part of an employee’s expectation in early July since they started work.
Once an employer has sent their finalising STP event for the financial year the ATO will pre-fill this information on an employee’s tax return. The move signifies an effort by the ATO to make the Australian tax system smarter, more automated and more efficient. The ATO is predicted to receive 100’s of millions of pay events per annum via the STP gateway and it could result in less paperwork for you at the end of the financial year.
Don’t wait until the last minute, it is now very important to plan your journey to STP. Businesses will have various processes to check and adjust to get ready. The impact on your business may reach further than just the payroll department, HR and finance may need to review their processes that relate to onboarding employees, paying their wages and reporting/paying superannuation.
What is Single Touch Payroll?
Single Touch Payroll or STP is a simple reporting change being implemented in Australia to streamline payroll. This initiative is aimed to bring real time visibility to companies payroll processes, to achieve greater accuracy and timeliness in the reporting process.
When will STP start?
1st July 2018 – Companies with 20+ employees by 30th April 2018
1st July 2019 – Companies with 19 or less employees by 30th April 2018(subject to legislation being passed in parliament)
How should I prepare for STP?
Start by getting in contact with your service provider to make sure that they have the necessary software updates in place for the change. Find out when your payroll solution will be ready for Single Touch Payroll reporting and that is coincides with your given deadline.
How will this affect my company’s payroll?
The Single Touch Payroll is an automated process. After the initial implementation stage, it should not affect your payroll processes. The only difference is, after each “payroll event”, additional reporting information will be sent to the ATO by your payroll software provider.
Where can I get more information on Single Touch Payroll?
For more information on STP you maybe visit ATO’s main site at:
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