Ready Set Go for Single Touch Payroll!
Single Touch Payroll (STP) rolls out on 1 July 2018 for businesses with 20 or more employees, and automatically reports payments made to your employees to the ATO including salaries and wages, PAYG withholding and Superannuation. This will be reported with every pay run.
To see if your business needs to comply, you need to have undertaken a head count of employees who worked on 1 April 2018. This is not FTE’s but actual bodies including full time part time and casual staff, or employees overseas or on paid or unpaid leave. The only exemptions apply for seasonal workers who were employed for a short time only. You don’t need to include any employees who have left or casual employees who did not work in March, independent contractors, labour hire staff, or company directors or officeholders. After you’ve tallied your headcount – If you have 20 or more then you will need to implement Single Touch Payroll.
Keep in mind, if you are part of a company group, you need to include the total number of employees within all member companies for the wholly owned group.
Many accounting and payroll software packages are getting set up for Single Touch Payroll. Xero has received a deferral exemption to 31 December 2018 to help transition entities over. They have applied for these on behalf of their users.
If you use Xero, you will notice that there will be a banner on your payroll screen on or about 1 July 2018. You will need to ‘click’ on this to register for STP. Follow the steps to register. When doing your pay runs, you will notice a new ‘FILE’ button. This files the information directly with the ATO under the STP requirements. If you register in a payrun sometime after 1 July, you don’t need to go back to prior payruns – just click the “File Now” button in the current payrun and up to date information will be lodged.
More information on how this works in Xero including a handy video is available at this link:
If you need more time to comply there is a deferral process which is outlined below in this article.
Most importantly, ensure your payroll staff know about Single Touch Payroll. There is a lot of information about the new process available through the ATO website which can be found here:
Before 1 July, check you are paying your employees correctly including wage/salary and superannuation entitlements. You’ll also need to ensure all employee information in your payroll system is accurate, including names, address, and date of birth records.
If your software is ready but you’re not ready to implement, you can apply to the ATO for a deferred start date. You’ll need to follow the ATO’s deferral guidelines. Evolve can apply on your behalf or you can complete and submit the deferral request yourself from here: https://www.ato.gov.au/workarea/downloadasset.aspx?id=55796
Generally, deferrals will only be considered if you are:
- Not able to start by your software provider’s deferred start date
- migrating to new STP enabled software
- using a customised payroll solution and you need time to configure and test your updated product
- have complex payroll arrangements and need more time to make the transition
- entering or have entered administration or liquidation
- impacted by a natural disaster
- impacted by other circumstances outside of your control
During the first year of single touch payroll the ATO will be providing extra support. If you make an error you’ll have the opportunity to correct it, and during the first year penalties generally won’t apply.
The Single Touch Payroll system will roll out to employers with 19 or fewer employees as from 1 July 2019.