The Single Touch Payroll (STP) is law and applies to all employers.
All employers must participate.
“substantial” employers, (20 or more employees by headcount),
The count happens as of 1 April, 2018.
they should enter STP during the year 1 July 2018 to 30 June 2019.
All other employers
New law enacted on 12 February 2019 brings all employers into the requirement
The law requires commencement from 1 July 2019
The ATO is engaging in transition program to bring employers in progressively from 1 July 2019
ATO Approach is no penalties will apply in the first year
Micro (1-4 employees) and disconnected employer concessions
The law still applies requiring you to enter STP as from 1 July 2019.
ATO approachis that there will be a year of no penalties
Quarterly reporting in alignment with your BAS lodgement is an option for some
ATO has approached the software companies to provide low cost payroll solutions (<$10 per month). A number of companies have responded that this will happen.
Anyone can elect to enter STP earlier than required
It is about reporting your Payroll, it is NOT about paying earlier.
You submit payroll and superannuation data to the ATO each “PayEvent”. This could be weekly, fortnightly, monthly or whenever you pay.
A PayEvent is each time you pay someone and you should be generating a pay slip. Some of the data on the pay slip is now sent to the ATO:
The year-to-date totals of gross wages, allowances, deductions and gross tax for each employee being paid.
The year to date amount of Superannuation Guarantee that has been accrued.
You will also report the W1 Gross Wages & W2 Gross Tax for the payrun (so that the ATO will eventually prefill these totals for the BAS period onto the BAS for employers who report W1 & W2 on the BAS).
Superannuation payment information is going to be sent to the ATO by the SuperFunds. This information will be used by the ATO to check you are paying.
Your payroll software should do it all for you.
It is a substantial change such that your software will need to control what is reported when and in what form. We recommend that you await the information from your payroll software provider and then bring your systems up to date.
If you do not have accounting software or internet, the ATO are considering other reporting mechanisms.
Over 50,000 employers are already reporting to the ATO using STP.
Substantial employers should be providing STP information before 1 July 2019.
Other employers should commence STP reporting from 1 July 2019.
Any employer can enter STP as soon as they are able.
The ATO will gain greater visibility of all employers, enabling earlier activity to ensure the employer is paying their PAYGW and their SGC.
The employer will no longer be required to provide payment summaries to their employees. The ATO will provide them.
The ATO will prefill tax returns with the payroll information.
The ATO will make the payroll information available to employees all year through myGov.
What is the impact?
STP means that your payroll system employee information (names, addresses, date of birth, TFN) needs to be accurate and complete all year.
Each payrun triggers the requirement to report to the ATO which enhances the requirement for someone to correctly authorise that the pay information is true and correct and able to be lodged. (Wait for the detail).
Hopefully your software will be able to provide a streamlined payroll process that includes the authorisation and also the submission of the reports to the ATO.
What you need to do!
– Employers should streamline their payroll process by utilising a software solution.
– We are Single Touch Payroll Ready, we will be opting in all of our clients from 1st July 2019 for streamlining the process (if we implement now we need to produce Payment Summaries for ex-employees as well as finalising STP for current employees.)
– In June 2019 we will forward a flyer to all clients who have employees with a fact sheet to distribute preparing your employees for STP and streamlining the process.
Future of STP
The ATO will streamline the process for a new employee by automating the Tax File Number Declaration and SuperChoice form into payroll software and myGov.
Note: The employer’s payroll records are always the “source of truth”. Therefore, any amendments to past pays, or any fixes required are updated in the employer’s systems and records. At the next PayEvent the ATO will receive the updated YTD information. There is no need to go back and amend past PayEvents.
The employer will still have to “finalise” a payroll year by indicating to the ATO that the information they are now being sent is the final version and can be used for tax returns.
Updated: 13 February 2019, written by the ICB Australia for Bookkeepers