RSM Australia

Single Touch Payroll reporting is coming - employers take note!

Employers with 20 or more employees will need to change the way they report to the ATO from 1 July 2018. 

Single Touch Payroll (“STP”) is a new reporting system the ATO has introduced. STP involves the reporting of payroll payments, PAYG and superannuation directly to the ATO for every pay run that is made.

 

What do EMPLOYERS need to do?

Employers will need to conduct a headcount on 1 April 2018 to see if they are subject to the new STP reporting requirements

If you have less than 20 employees at 1 April 2018

Employers with 19 employees or less do not need to take any action at this stage. We do note however there is currently legislation in parliament to introduce STP for these employers from 1 July 2019.

If you have 20 or more employees at 1 April 2018

Employers with 20 or more employees will need to ensure their accounting and payroll software is STP compatible, to start reporting to the ATO through an STP enabled solution from 1 July 2018.

HOW DO I KNOW IF MY SOFTWARE IS STP COMPATIBLE? Single Touch Payroll

Your payroll software should enable you to meet the ATO compliance requirements. The software providers are currently working together with the ATO to implement these changes. They will be providing updates to their current customers over the next few weeks in order to implement changes prior to 1 July 2018.

You need to ensure the software version you are running has been STP-enabled. Click here to see some links to common accounting package providers and what they have to say about their compliance status.  Desktop files will need to be updated to a Cloud provider.   If you have a desktop file that needs updating to cloud or if you are unsure your current system will be compliant, please contact your RSM adviser for more information and assistance.  If you would like to read more about our Digital Services click here.

If you would like more information regarding STP please refer to the following link to the ATO website, click here            

HOW DO I DO MY HEADCOUNT ON 1 APRIL 2018?

  • Like  a census – count each employee on your payroll on 1 April
  • Only do the headcount once. If you are 20 or over you will remain in the STP reporting system even if your employee numbers fall below 19 later on
  • No need to send your headcount information to the ATO. Just keep a copy for your records

 

INCLUDE IN HEADCOUNT

DO NOT INCLUDE

  • 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).
  • 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
  • religious practitioners.

WHAT PAYMENTS DO I NEED TO REPORT?

Once you start reporting to the ATO through your Single Touch Payroll (STP)-enabled software you will be sending your tax and superannuation information on or before each pay day. The ATO calls this a 'pay event'. Below is a list of amounts subject to mandatory STP reporting.

 

PAYMENT TYPE

BAS LABEL

A payment to an employee, such as salary or wages

W1, W2

A payment of remuneration to the director of a company

W1, W2

A payment to an office holder (for example, a member of the Defence Force)

W1, W2

A payment to a religious practitioner

W1, W2

A return to work payment to an individual

W1, W2

A payment for termination of employment

W1, W2

An unused leave payment

W1, W2


For more information, contact your RSM adviser or refer to the ATO website -

Contact your RSM Adviser >>

click here for the ato Website >>

Authors

Peter Saccasan
National Head of Business Advisory - Sydney